Trump blasts U.S. central bank again over rate hikes

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Trump has singled out his handpicked chairman of the Fed, Jerome Powell, for blame, insisting that the bank's interest rate hikes are responsible for the downturn.

United States President Donald Trump expressed confidence in the Treasury Secretary, Federal Reserve and USA economy on Tuesday, moving to calm financial markets further roiled after Bloomberg News reported that the President had discussed firing the central bank's chairman over raising interest rates.

"They're raising interest rates too fast", he said in the Oval Office after a Christmas Day phone call with United States troops. On Friday, the S&P 500 closed at 2,416, leaving it down 17 percent on the quarter and more than 9 percent for the year.

Treasury Secretary Steven Mnuchin called top USA bankers on Sunday amid the pullback in stocks and said he was calling a meeting of financial regulators to discuss ways to ensure "normal market operations".

"I am highly confident that the president is very happy with Secretary Mnuchin", Hassett told Fox Business host Charles Payne. The S&P 500 has lost about 19.8 percent from its September 20 closing high, just shy of the 20 percent threshold that commonly defines a bear market.

Mnuchin's call for a meeting with the CEOs of the banks came after the US government went partial shutdown on Saturday, following a deadlock in Congress over Trump's demand of funds for the construction of border wall between the US-Mexico.

The President - answering reporters' questions at the White House after addressing U.S. armed forces members on a Christmas Day video conference call - said the Fed was hiking borrowing costs because the "economy is doing so well", adding that USA companies were having "record kinds of numbers" and it is a "tremendous opportunity to buy". "I think it's a tremendous opportunity to buy".

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Relations among White House advisers are reportedly tense due to the rate hikes, and Hassett is among those who are opposed to intervention in the Fed's policy-making. "But I think they will get it pretty soon".

Legal experts say it is not clear whether Trump could in fact dismiss Powell.

On Tuesday, Trump had complained that the Fed is raising interest rates too quickly, this after a precipitous 650-plus point plunge in the Dow Jones Industrial Average in a shortened pre-holiday trading session on Monday.

The assurance comes in the face of repeated attacks on the central bank by the President, who most recently called the Fed the USA economy's "only problem" on Monday.

Heavy selling followed a failed attempt by Treasury Secretary Steven Mnuchin to calm markets by assuring bank CEOs that there was "ample liquidity".

The call struck market observers as curious given that investors have expressed no concerns about the banks' financial condition.