The Federal Reserve included interest rates on Wednesday and recorded the pressure of President Donald Trump and his recently escalated rhetoric.
The Fed while lowering prices Several times last autumn several timeshas remained the course for Open Market after the last four sessions of the Open Market Committee. On Wednesday, the Fed did the same and held interest rates between 4.25% and 4.5% compared to its peak in the past two years, but still higher than before the covido between 1.5% and 1.75%. In his decision the Fed quoted Low unemployment and a solid labor market in his decision to keep interest rates stable.
The decision on Wednesday included two different voices of the majority, Fed governors Michelle
Bowman and Christopher Waller. It is the first time in more than 30 years that two governors have refuted in a single meeting.
The US economy has nevertheless retained a certain resilience Analyst warnings partly caused by Trump’s tariffs through impending financial turbulence. The unemployment rate decreased slightly to 4.1% in June and has basically remained stable in the past 12 months. In the meantime, the annualized GDP growth increased by 3% in the second quarter and increased from the contraction of 0.5% in the first quarter.
This combination of stable unemployment and a return to GDP Recent skepticism Luke Tilley, a former consultant and chief economist from Philadelphia, said at Wilmington Trust about data about data published by the Bureau of Labor Statistics.
“If you see that the unemployment rate remains low when GDP has decreased to a positive decline, if you do not see any impending problems, you are really reluctant to cut or even say that it will be cut because it is much more difficult Assets.
At the same time, the youngest GDP shows Assets. The core inflation, which excludes the volatile food and energy prices, also rose to 2.9% compared to 2.8% in the previous month.
While the concerns about unemployment have been in the foreground for the Fed in recent months, potential signs of growth in delay growth bring more balance than before the Fed’s double mandate, said Hesser.
Trump’s collective bargaining policy is likely to weigh consumers and companies in the second half of the year, and the FED is probably waiting for further data to evaluate these effects. Nevertheless, said Hesser, despite the shortcuts of tariffs on Wednesday, the FED will reduce interest later a year, possibly at the last meeting of the year in December.
“I would expect to hear some comments today that acknowledge that the risks of inflation and the risks of the labor market, which is really growth, get into a better balance, and so it is for what we expected, the fourth quarter shortcut – two cuts of 50 basis points,” he said.
While the Trump administration continues to negotiate trade agreements with its allies, including the EU, the threat of tariffs and their effects on inflation have provided the market amount. On Wednesday Trump said he was imposed on one 25% tariff for imports from India Because of the high tariffs of the country for US goods. Trump also claimed that India bought a large part of its military equipment and energy from Russia, which justified a “punishment” not specified.
Since he was elected president in November, Trump has continuously criticized Powell and the Fed because he did not fall as quickly as possible. Trump has recently increased his rhetoric by repeating Powell that he should insult him as “Mr. Late” and “one of my worst commissioners”. The president has it too confiscated after a previously planned renovation of the Federal Reserve headquarters in Washington DC to publicly shape Powell and point out his possible dismissal.
