On The Money: Trump wants Fed to slow down on rate hikes | IMF warns trade wars will hurt economic growth | Exxon putting money behind carbon tax

On The Money: Trump wants Fed to slow down on rate hikes | IMF warns trade wars will hurt economic growth | Exxon putting money behind carbon tax
© Greg Nash

Happy Tuesday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis.



THE BIG DEAL--Trump tells Fed to hit the brakes on rate hikes: President TrumpDonald John TrumpButtigieg surges ahead of Iowa caucuses Biden leads among Latino Democrats in Texas, California Kavanaugh hailed by conservative gathering in first public speech since confirmation MORE piled on his criticism of the Federal Reserve on Tuesday, telling reporters he thought the central bank was moving too quickly with a series of planned interest rate hikes.

Trump said he's not happy with the Fed's recent rate hikes and didn't think the current rate of U.S inflation warranted higher borrowing costs. The Fed has raised interest rates six times since Trump took office, most recently in September, and is expected to issue another hike in December.

"I don't like it," Trump told reporters as he prepared to depart for a rally in Iowa. "I think we don't have to go as fast."

Trump since July has often griped about the Fed and its chairman, Jerome Powell. The president has argued that Fed rate hikes would suffocate the strong U.S. economy and tie his hands while the administration seeks new trading terms with Europe and China. I've got more on his latest complaint here.


The background:

  • The Fed has hiked rates eight times since 2015.
  • Six times of those rate hikes have taken place since Trump took office, most recently in September. And the bank is expected to issue another hike in December.
  • The Fed is attempting to raise interest rates slowly enough to support maximum growth, but quickly enough to prevent the economy from overheating and spurring rampant inflation.
  • The Fed's rising baseline interest rate range is still relatively low by historical standards. But Fed rate hikes have put upward pressure on consumer interest rates while scrambling the torrid stock market.



IMF: US trade wars to slow global economic growth: The International Monetary Fund (IMF) on Monday said the global economy would grow at a slower pace than the group had projected due to rising trade tensions between the U.S. and major world powers.

The IMF cut its projection for global growth for 2018–2019 by 0.2 percentage points of gross domestic product, citing rising risks to worldwide economic expansion.
IMF research director Maurice Obstfeld wrote Tuesday that the projection "appears over-optimistic," noting that growth has plateaued at 3.7 percent amid mounting threats to global prosperity.

Obstfeld said that growth had been "less balanced" than expected as developing economies faltered and larger countries leaned on "unsustainable" policies. He also said the impact of tariffs and the deteriorating U.S.-China relationship would weigh on global growth. I'll tell you why here.


Exxon contributes $1 million to carbon tax campaign: Exxon Mobil Corp. is making a $1 million contribution to an advocacy effort calling for a tax on carbon dioxide emissions.

The money is going to Americans for Carbon Dividends, the advocacy arm of the Climate Leadership Council, a group that has proposed a $43 per metric ton tax on carbon dioxide emissions. All revenue would be distributed to taxpayers via tax refunds or direct payments.

The proposal is backed by big businesses and former GOP policymakers like James Baker and George Shultz, who each served as secretary of State under a Republican administration.

"This is a significant step in furtherance of the Baker-Shultz carbon dividends proposal," said Greg Bertelsen, senior vice president of the Climate Leadership Council. "We are still very early in the process. The organization is now just three months old. With Exxon's contribution, we already have over $3 million committed to this effort." The Hill's Timothy Cama tells us more here.