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Trump demands further rate cut as economy 'handcuffed' by Fed

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The second largest economy withdrew itself from purchasing US agricultural products, which could hurt Midwest farmers who rely heavily on Chinese purchases-a move that could put Trump's re-election in 2020 in jeopardy.

US President Donald Trump, in his tweets, pressures the Federal Reserve to cut interest rates, saying that a weaker dollar can help US firms compete.

Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. CNBC noted that Trump's comments come "with USA government bond yields tumbling and the closely watched spread between the 3-month and 10-year notes at its biggest inversion since April 2007, just as the economy was heading into the financial crisis".

Almost 70% of economists responding to an additional question said the latest developments had brought the next USA recession closer. "That can lead to unstable financial markets and worse economic outcomes", the former Fed leaders wrote.

"This then feeds through into consumer sentiment and spending more broadly in the economy with recession risks mounting".

In a series of tweets, he noted that overnight three central banks - those in India, Thailand and New Zealand - had cut rates. And now again late last night.

Historically, the Federal Reserve has typically only issued interest rate cuts during periods of USA economic contraction. Current Fed Chairman Powell has come under heavy attacks from Trump, who has repeatedly attacked Powell's decisions and has reportedly explored the possibility of either firing Powell or demoting him as Fed chairman.

US President Donald Trump blames the Federal Reserve for keeping interest rates too high. He had been hoping for a rate cut of at least a half-point. But the rest did not.

Continuing Wednesday's thrashing of the Fed for its alleged timidness in cutting the interest rate, Trump accused the regulator of "call [ing] it wrong at every step of the way" in his trade conflict with China and other countries.

"They don't need to cut at the moment".

"Any effort to weaken the dollar through intervention or anything else would be really leaning against a very strong wind and I don't think there is much prospect for their finding a way to do it". The Fed made up our minds closing week to quit that program.

That consensus was little changed from last month, even though a higher number of economists now predict a substantial slowdown despite the shift in expectations for Fed easing.

"It's fake news, as Trump would say", Bergsten told AFP.

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