U.S. Federal Reserve System chairman Jerome Powell hit back at president Donald Trump's latest rants against him and members of the Fed saying the central bank has no part in crafting U.S. trade policy.

“Trade policy’s not the business of the Fed,” said Powell in a press conference Wednesday afternoon. He did, however, emphasize U.S. “Trade policy is something that’s weighing on the outlook of the economy."

He also underscored the Fed is “fully committed to pursuing our goals of maximum employment and stable prices” in line with its mandate. The Fed, Powell said, will “act as appropriate to sustain the expansion” of the economy.

On Wednesday, following another Fed rate cut, a disappointed Trump again lashed out at Powell and the Federal Open Market Committee (FOMC) that sets interest rates, saying these people have “no ‘guts,’ no sense, no vision!”

The latest interest rate cut was by a quarter point to a target range of 1.75% to 2%. There was also a 30 basis-point cut to the interest paid on excess reserves.

The FOMC, however, wasn't unanimous in voting for the new cuts. Three Fed regional presidents voted against the cuts. Two of presidents previously said they preferred to keep the funds rate unchanged due to the strong economy.

The Fed also gave no indications further interest rate cut are in store. This reticence helped trigger a selloff on Wall Street.

The Dow Jones Industrial Average dropped by as much as 200 points, or 0.8 percent, shortly after the rate cut announcement. It later recovered its losses. The S&P 500 fell as much as 0.8 percent, while the NASDAQ Composite fell as much as 1.1 percent.

Economists are blaming Trump’s uncalled for trade war against China as a key factor slowing down U.S. and world economic growth. Some are predicting a global economic recession by 2020 due to the trade war.

Trump has been unsparing in his criticism of the Fed. He argues the Fed needs to slash interest rates to zero or lower to boost an already strong economy. He also says current U.S. interest rates place the U.S. at an economic disadvantage compared to countries with lower rates.

On September 11, Trump ranted, "... INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet.

"The USA should always be paying the the [sic] lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”

Asked about the effects of these corrosive jibes on the Fed, Powell said, “In terms of the morale of the institution, I’d say it’s very high. We’re very unified. We feel we’re doing the best job we can serving the American people.”

The Fed's three specific mandates as regards monetary policy are maximum sustainable employment, stable prices, and moderate long-term interest rates. These goals were set forward by the U.S. Congress in the Employment Act of 1946 and the Full Employment and Balanced Growth Act of 1978. Nowhere in both these laws is the Fed given authority to set U.S. trade policies.

The liquidity crunch has "no implications for the economy or the stance of monetary policy," US Fed Chairman Jerome Powell said The liquidity crunch has "no implications for the economy or the stance of monetary policy," US Fed Chairman Jerome Powell said Photo: AFP / Olivier Douliery