Federal Reserve goes through with expected US interest rate hike, chair Jerome Powell says he is ‘not worried’ about Trump criticism

The US central bank, the Federal Reserve, has confirmed it is raising interest rates for a fourth time this year in the face of sustained opposition from President Donald Trump.

As expected before the announcement, the Fed said it would hike interest rates by 0.25 to a range of 2.25 per cent 2.5 per cent – the highest level in a decade.

But, it added, there would be fewer rate hikes in 2019, with the US economy having been growing strongly and the job market improving.

“Some” further rate hikes would be required, it said in a statement, reducing the expected number of raises next year from three to two.

It said economic risks were “roughly balanced” but added it would "continue to monitor global economic and financial developments and assess their implications for the economic outlook."

There were no dissents in the policy decision, it added.

Yesterday Trump continued his spat with the central bank, criticising the then-expected decision to raise rates on Twitter.

“It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike,” he tweeted.

In today's press conference, responding to questions about Trump’s criticism, Powell said: “Political considerations play no role in our decisions about monetary policy. We are absolutely committed to that mission and nothing will deter us from doing what we think is the right thing to do.

"I am not worried [about Trump] because I know we are always going to do our jobs as we have always done them."

But he added the Fed would continue making its decisions based on the best “objective” data available, repeatedly calling 2018 a “strong year”.

Trump has long been opposed to rising interest rates on the basis they might hamper economic growth, and has in the past called the Fed “crazy” and “loco” for doing so.

Much of his past criticism has been aimed at Fed chairman Jerome Powell – who Trump appointed – for being too “aggressive” in raising rates.

The Fed has raised rates throughout this year in an attempt to reduce the positive effect of financial policy on the economy, which policymakers believe is growing faster than is sustainable.

There are concerns the swiftly growing economy could face struggles next year as the financial boost from the government’s spending and $1.5 trillion package of tax cuts ceases to have as strong an effect and the global economy slows down.