Trump targets Federal Reserve and Jay Powell after producing reading

President Donald Trump Speaks at Reception at Hispanic Heritage Month at the White House in Washington, September 27, 2019.

Kevin Lamarque | Reuters

President Donald Trump again attacked the Federal Reserve on Tuesday after the weakest US production reading in 10 years.

In a tweet, President Fed Fed Jerome Powell and the central bank "have allowed the dollar to get strong, especially in relation to ALL other currencies, that our producers are adversely affected." He claimed the Fed has set rates "too high" . "

"They are their own worst enemies, they have no clue," he wrote. "Pathetic!"

As his trade war with China rages on, Trump has repeatedly accused the Fed's interest rate policy of worries about a declining US economy. He has claimed that the central bank has not moved fast enough to ease monetary policy ̵[ads1]1; even though the Fed has cut the benchmark rate twice this year.

His tweet comes after the Institute for Supply Management production reading dropped to 47.8 in September, down from 49.1 in August. A reading below 50 shows a production contraction.

The poor financial data contributed to large US stock indices slipping on Tuesday.

The dollar index, which measures the US currency against a basket of global currencies, has climbed more than 3% this year and is near the highest level since mid-2017. A stronger dollar relative to global currencies is generally expected to reduce exports and increase imports.

While exchange rates may have contributed to the operation of the industry in September, so did trading, according to ISM.

"Global trade remains the most significant issue as demonstrated by the contraction in new export orders that began in July 2019. In general, this month's sentiment is cautious for short-term growth," said Timothy Fiore, head of ISM Manufacturing Business Survey Committee.

Trump has repeatedly belittled all concerns about a looming US recession. He also claimed that his trade conflict with the world's second-largest economy will not hurt businesses or consumers – despite indications that some companies have already begun to hurt Americans and worry.

Seeing the concerns of a fledgling economy as an effort to discredit him before the 2020 election, Trump has argued that the central bank is to blame for any slowdown instead of his own policy.

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