United States government refrains from calling China a currency manipulator

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Oanda analyst Craig Erlam said the Fed minutes re-affirmed the widely held opinion at the United States central bank that interest rates have further to rise, including another hike this year.

The remark is the latest in a run of commentary from the president, raising questions about the Fed's independence. "It seems to me the Fed is in a methodical, rate-raising environment - exactly what they're supposed to do".

It was a rare economic analysis from Quarles, the Fed's Vice Chair for Supervision.

Companies facing higher materials costs told the Fed they had an 'increased ability to raise the prices of their products, ' according to the minutes. "Obviously, presidents can speak out if they choose to and give their opinions about policy, there's no law against that, but I don't think it's wise and I do think the Fed has a strong reputation for acting in an independent and non-political way and I would not like to see that reputation damaged".

The central bank has been increasing interest rates for almost three years.

Trump has railed against the Fed repeatedly in recent weeks, saying the central bank "has gone crazy" and calling its interest-rate hikes "loco."

As opposed to a mild brake on the economy, Bullard argued that rates that high "would be moving quite a ways into restrictive territory".

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Chairman Powell - who Trump nominated last year to take the place of Janet Yellen, who held the position for four years - has said policymakers are seeking to restore rates to "normal" levels after the 2008 financial crisis.

A few participants expected rates would need to rise enough to modestly restrain economic growth, even as two others "indicated that they would not favor adopting a restrictive policy stance in the absence of clear signs of an overheating economy and rising inflation". If and when that happens, my sense is that the president will be thankful for the Fed.

The Fed directly controls only short-term interest rates.

"There was a pretty well-formed expectation that it would more likely showcase a Fed that's more confident and assertive debating tighter policy", said Richard Franulovich, head of FX strategy at Westpac Banking Corp in NY.

Asked if he thinks the current path of rate hikes is threatening economic growth, Quarles said it depends on one's expectations about the USA economic trajectory.

The S&P has only partially recovered ground lost last week, when it marked its biggest decline since March as investors anxious about rate hikes. The Fed needs to push interest rates up by at least another full percentage point to prevent asset bubbles or an unwelcome acceleration in inflation.

The US economy has been growing more quickly this year than many economists believe is possible without generating higher inflation, with the jobless rate at its lowest level in decades.

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