Daniel Dimartino Booth, CEO and chief strategist of QE Research, reacted to the Federal Reserve, which leaves unchanged interest rates on ‘earning money’.
federal Reserve On Wednesday, he announced that he would leave unchanged interest rates amid uncertainty about inflation and economic conditions.
Fed’s decision leaves the rate of benchmark Federal Funds from 4.25% to 4.5% and cuts three consecutive interest rates in the most recent meetings of the Central Bank-in which the 50-base-point cut in September along with 25 of 25 A pair also included in November and December -Basis -point cuts.
“Recent indicators suggest that economic activity continued to expand at a solid pace,” the Federal Open Market Committee (FOMC) has written, which is a group responsible for guiding the monetary policy of Fed. “The unemployment rate has stabilized at low levels in recent months, and the labor market situation remains solid. Inflation remains somewhat high.”
FOMC’s statement said that Fed forwards its double mandate to get maximum employment and Inflation on 2% For a long time. It states that “the economic approach is uncertain, and the committee is attentive to the risk for both sides of its double mandate.”
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Federal Reserve Chairman Jerome Powell held a press conference at the end of the two -day Federal Open Market Committee meeting on March 20, 2024 in the Federal Reserve in Washington, DC. (Photo by Mandel Nagan / AFP through Getty Image / Getty Image)
At this time, FOMC members were unanimous in the decision to quit unchanged rates. The committee’s statement said that the policy maker “will be prepared to appropriately adjust the attitude of monetary policy if the risk emerges that can disrupt the achievement of the committee’s goals” and this labor market data, inflation and Will consider many information including expectations. , Also as financial and international development, it considers its next step.
Fed Chair Jerome Powell Talked at a press conference after the announcement and said, “Overall, a wide set of indicators suggests that conditions in the labor market are roughly in balance. Labor market is not a source of significant inflation pressure. Inflation is quite in the past Is reduced to two years, but is somewhat high relative to our 2% long -lasting target. “
Powell said that Fed reduced the interest rates from one full point in its three former meetings and that was appropriate “in the light of progress on inflation and rebuilding the labor market.”
He said, “Our attitude was quite less restrictive and the economy was strong, we do not need to be in a hurry to adjust our policy stance,” he explained. “We know that policy may be a hindrance to progression or much inflation. At the same time, at the same time, the policy can weaken the restraint very slowly or to reduce the economic activity and employment very low. Is.”
Federal Reserve Chairman Jerome Powell said that Fed would contact future interest rate decisions based on the latest economic data. (Liu ji / Xinhua Getty Image / Getty Image)
What will fed do with interest rates and how will Trump react?
Pavel was asked by a reporter whether he was replied to the President Donald Trump’s Last week when comments in the World Economic Forum said that he would “demand” that the interest rates were reduced, a reporter asked if Trump had relamented that demand, as well as if he had a response or like this What was the influence of the comments of the President.
“I am not going to make any response or comment that there is no comment on whatever the President says. It is not appropriate for me to do so. But the public should believe that we will continue to do our work as We have always focused on using. Our equipment to achieve our goals and actually keep our head down and do our best, so we serve the best, “Powell said.
In response to a follow -up question, Powell said that he had no contact with Trump.
President Donald Trump has criticized Fed Chair Jerome Powell several times, nominated in the role in 2017. (Through Saul Loaib / AFP Getty Image / Getty Image)
Powell also took a question about how he and the fed can assure the American public that the central bank will continue to operate independent of politics.
“As I have said countless times in years – this is what we are, this is what we do. We study the data, we analyze how it will affect the approach and balance of risks, and We try to use our equipment. To give our best understanding, our best thinking to achieve our goals, “he said. “This is always what we do. Don’t look at us to do anything else.”
“A lot of research shows that a central bank is the best way to operate. This will give us the best opportunity to achieve these goals for the benefit of American people. It is always what we are going to do. , And people should have faith in that, “Powell said.
Powell was asked by Fox Business’ Edward Lawrence about the impact of immigration policy Unemployment rate Given his comments in September that the influx of illegal immigration contributed to its rise.
“Whatever is happening is that the flow of border has reduced greatly and it is every reason to expect that to continue. And so far, employment generation is slightly reduced … if they have two things If it comes down together, this may be a reason to stabilize the unemployment rate, “Powell replied.
The Speaker was also asked about the staffing levels of the Fed Elon MuskThe leader of Trump’s Government Efficiency Department (DOGE) said that the central bank is “absurdly overstapress”. Powell replied that Fed “Fed” a very careful budget process where we fully know, we give it to the public and we believe that we do it. “
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The reaction of the financial markets to the Fed’s break was largely given silence, which was widely estimated to be ready, about 0.4% with the S&P 500 index and almost during the Dow Jones Industrial Average afternoon business It was 0.2% below.
The chief global strategist, Seema Shah, the chief global strategist for the principal asset management, said that “Fed is trying to respond to only data and new administration policies. As they come out. Many times, when the policy of the government – especially Tariff Policy – is so uncertain, they do not have an edge of forecast.
Shah said, “But don’t make any mistake, if the second consecutive inflation prints the next month, together with a slight weakness in the development of jobs, we can start listening to the tone renewed to Fedespek,” Shah said Said.
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The next meeting of the Fed is scheduled for 18 and 19 March, and the market expectations for cutting the rate released in the next meeting were reinforced by the announcement of the central bank on Wednesday.
According to the CME Fedwatch Tool, through the meeting of the Fed through the meeting of the Fed through the meeting of the Fed through the meeting of the Fed, the possibility of the remaining rates on the current target limit of 4.25% to 4.5% through the meeting of the Fed through a march meeting of Fed. 79.6 after 79.6 It is %.
