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UPDATE 1-Trump says Fed should cut U.S. rates; Powell doing 'bad job'

(Adds comments on issue of firing central bank chief)

WASHINGTON, June 26 (Reuters) - U.S. President Donald Trump on Wednesday called on the Federal Reserve to lower interest rates so the United States can compete with countries that he said are devaluing their currencies.

Trump said Fed Chair Jerome Powell was doing a "bad job" managing policy as countries like China stimulate their economies.

"He has to lower interest rates for us to compete with China," Trump told Fox Business Network, adding that other counties are also stimulating their economies. "If they devalue and we can't we are no longer on a level playing field."

Trump said he believed he had the right to fire or demote Powell. But he said: "I never suggested I was going to do that."

Some legal experts say it would be hard or impossible for Trump to remove Powell.

The Fed started slowly raising interest rates in 2015 as the unemployment rate fell to its lowest levels in decades.

But the central bank paused its rate hike campaign this year as concerns grew that a global economic slowdown and trade conflicts were weighing on the U.S. economy. Last week the Fed said nearly half of its policymakers think rate cuts could be needed this year.

Trump said the Fed went too far in raising rates and trimming its holdings of bonds.

"It's insane," he said. (Reporting by Susan Heavey and Jason Lange Editing by Chizu Nomiyama and David Gregorio)