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Speaking on a panel at this week's International Monetary Fund
and the World Bank meetings in Bali, Governor Mark Carney was
asked about Trump's remarks.
"Of the many qualities of Jerome Powell is he's an individual
who really understands the plumbing of the U.S. and the global
financial system," Carney said.
"And that's an incredible advantage for the system at a time
that the system is changing to have someone in his position who
has that level of technocratic expertise," said Carney.
As Wall Street suffered its worst one-day fall since February on
Wednesday, Trump accused the Fed of moving too fast in raising
interest rates when inflation is minimal and government data
points to a strong economy.
"I think ... the Fed is making a mistake. They're so tight. I
think the Fed has gone crazy," Trump said in Pennsylvania before
a political rally. [nL2N1WQ286]
The Fed last raised rates in September and left intact its plans
to steadily tighten monetary policy, as it forecast that the
U.S. economy would enjoy at least three more years of economic
growth.
At the meetings in Bali, IMF managing director Christine Lagarde
said she "would not associate" Jerome Powell "with craziness."
"No, no, he comes across, and members of his board, as extremely
serious, solid and certainly keen to base their decisions on
actual information, and decide to communicate that properly,"
she told CNBC.
U.S. presidents have rarely criticized the Fed in recent decades
because its independence has been seen as important for economic
stability. Trump has departed from that practice and has said he
would not shy from future criticism should the Fed keep lifting
rates.
Rising U.S. yields are a major factor behind capital outflows
putting pressure on emerging markets currencies.
Yet, Lesetja Kganyago, governor of the South African Reserve
Bank who was alongside Carney on the panel, said regulators need
to be "given the space to act independently without political
interference" in order to advance many agendas.
The Bank of England governor cited Powell's support for reform
of Libor (London interbank offered rate), after a rate rigging
scandal, as an example of the Fed chief's grasp of issues
affecting world markets.
The annual meetings of the International Monetary Fund and World
Bank are being held this week in Bali and attended by more than
19,000 delegates and other guests, including ministers, central
bank heads and some leaders.
(Editing by Ed Davies and Simon Cameron-Moore)
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