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The Federal Reserve does not have to protect investors




  neel kashkari federal reserve
Neel Kashkari defended the Federal Reserve from Donald Trump's attack, saying that the bank should not protect investors. | Source: Flickr / ProPublica

Another Federal Reserve president has talked about interest rates. Neel Kashkari says there is no need for interest rate increases right now, but the US Federal Reserve does not exist to protect investors.

Although stock markets show "nervousness", Kashkari says, investors need to find out what to do next.

We are not here to protect investors from losses. It is a capitalist economy in which we live, and if investors take risks, they should bear the consequences of these risks.

But says CEO of Minneapolis:

We are watching the stock market.

No Reason for Using Economic Brakes

Kashkari, echoing the Atlanta Federal Reserve's latest comments by Raphael Bostics, thinks it's time to stop interest rate hikes:

I can't see any reason why we need to push the brakes mainly on the economy, let's continue the job market to strengthen and pay and inflation picks up and we can always raise prices.

Last week, Bostic said that in between uncertainty:

The appropriate answer is to be patient by adjusting political stance and waiting for greater clarity on the direction of the economy and the risk of prospects.

After a number of interest rate increases in 201

7 and 2018 and falling stock markets by the end of 2018, the US Federal R eserve took the pressure from the markets early in January. Federal Reserve Chair Jerome Powell said:

We will be patient when we look to see how the economy develops.

The markets reacted with five days of subsequent gains.

S & P 500 (Blue) Dow Jones Industrial Average (Red) and Nasdaq (Yellow) Performance Over the Last Year | Source: Trading View

Federal Reserve United and Independent

Federal Reserve Vice President Richard Clarida has since said that the Federal Reserve could be "very patient."

Kashkari's comments on investors are defending US President Donald Trump's attacks on the central bank. He says the Federal Reserve is "united" in its independence and focuses on data.

The Federal Reserve Chair Powell resigned Trump's criticism when the market fought in late 2018 and said he would not resign. The Federal Reserve is an independent body and, despite Trump's comments, he cannot refuse Powell or force him to quit.

With further interest rate hikes in the near future, investors are now very unlikely to appear more confident despite other concerns. The Dow Jones Industrial Average ended the day with 141 points or 0.59%.

Highlighted image from Flickr / ProPublica


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