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Jay Powell said that an interest rate reduction in July was not “off the table” for the US Federal Reserve, in an obvious softening of his position that the central bank should wait until autumn to reduce the loan costs.
The Fed Chairman, who came across the increasing pressure from President Donald Trump to reduce interest rates signaled in the past few weeks that a reduction before September was unlikely.
But on Tuesday asked whether a reduction was out of the question this month, Powell replied: “I really can’t say. It will depend on the data. And we will meet by meeting.”
“I would not take a meeting off the table or put it directly on the table. It depends on how the data falls,” said Powell during a panel event in the ECB forum in central banking in Sintra, Portugal.
The market has largely dropped Powell’s comments and instead focused on the strong jobs and manufacturing figures published on Tuesday morning.
The two -year -old state treasury, which moves with interest expectations, rose at the session high after the data publication and rose by 0.05 percentage points to 3.76 percent. This suspected that dealers accepted bets on tariff shortcuts this year.
Despite Powell’s comments, the dealers withdraw on the betting of a reduction in installments in July on the futures market.
The president stretched the pressure on Powell on the lower interest rates and repeatedly mocked the Fed chair because he accelerated the aversion to cuts.
On Monday, Trump announced a handwritten note that he had written to the Fed chair, which had compared the United States with other central bank rates.
“Jerome – you are” too late “as always,” wrote Trump. “You cost the United States a fortune – and continue to do so – you should reduce the price for a lot!”
The question of when to cut is opened Schisma at the Fed Between pigeons that strive for lower loan costs to compensate for any weakening of economic growth, and the falcons feared that Trump’s tariffs would increase inflation.
Powell said on Tuesday that the Fed would have reduced interest rates faster if not the chief of the president.
“We went to the queue when we saw the size of the tariffs and where all the inflation forecasts for the United States were essentially increased,” said Powell.
Christine Lagarde, the President of the European Central Bank, said that she and other central bankers in Sintra and Bank of England Andrew Bailey, the Bank of Korea, Rhee Chang-Yong and the Bank of Japan’s Kazuo Ueda “exactly the same” were done as Powell.
Powell refused to say whether he wanted to stay on a governor after his term as an end. He will resign in May 2026, but can remain governors by 2028.
When asked what advice he would give his successor, Powell said that the Fed had to act “in a completely apolitical way” in order to achieve its mandate. “We don’t take a party. We don’t play one side against the other. We keep ourselves out of problems that are really not our Bailiwick.”
