UPDATE 1-White House calls for Fed to reverse on rate hikes

lPresident Donald Trump's top economic adviser said on Friday the White House would like the Federal Reserve to reverse some of its recent rate hikes and stop shrinking its balance sheet to protect the U.S. economy from weakness overseas.

"I am echoing the president's view," National Economic Council Director Larry Kudlow told CNBC, confirming that he had told news website Axios that he would like the U.S. central bank to cut interest rates by a half-percentage point immediately. "He would also like the Fed to cease shrinking its balance sheet, and I concur with that view," Kudlow said.

"There's no emergency," he added. "The economy looks fundamentally quite healthy. We just don't want that threat," Kudlow said, adding that Trump would also like the Fed to stop shrinking its balance sheet. "There is no inflation out there, so I think the Fed's actions were probably overdone," he said, referring to a three-year campaign by the central bank to tighten monetary policy.

The Fed last week brought that rate-hike cycle to an abrupt end as it abandoned projections for any further increase in borrowing costs and said it would stop shrinking its balanced sheet in September. Kudlow's remarks reflect an unusual public split between the White House and the independent central bank. Prior administrations have taken care not to comment on Fed policy, but Trump had railed repeatedly against the rate hikes.

Nevertheless, Kudlow told CNBC the Trump administration had no plans to get rid of Fed Chairman Jerome Powell. (Reporting by Eric Beech; Writing by Tim Ahmann Editing by Chizu Nomiyama)