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What will fed do with interest rates and how will Trump react?


The Federal Reserve is ready to announce its next interest rate step on Wednesday, which can respond to the President Donald TrumpWho recently called for Fed to reduce low interest rates.

Members of the Federal Open Market Committee (FOMC) are expected to leave the target for benchmark Federal Funds Rate, which is unchanged at the range of 4.25% to 4.5%-which is unchanged that the central bank in this rate-cutting cycle after three consecutive consecutive consecutive consecutive consecards Will be the first stagnation of. Cut rates brought below 5.25%.

The 9.1% annual inflation recorded in June 2022 remains in inflation in the economy despite being much lower than the 40-year high. The most recent reading of the Consumer Price Index (CPI) has come up at 2.9% above the 2% target rate of Fed. , According to the CME Fedwatch Tool, due to the large part of the tremendous inflation, the possibility of fed stagnation in the January meeting was 99.5%.

Fed’s anticipated break may motivate Trump to renew his criticism of the central bank and Fed Chair Jerome PowellAfter the President’s call for low interest rates last week.

Trump says

President Donald Trump nominated the Federal Reserve President Jerome Powell for the role in 2017, but has criticized the policies of the Central Bank under his leadership. (Through Saul Loaib / AFP Getty Image / Getty Image)

In a speech World Economic Forum Last week, Trump said that he is planning to reduce the price of oil and in return, energy prices to address inflation – which he said that said that the inspiration for the Fed to cut interest rates for the fed Should work in

“With a fall in oil prices, I will demand that interest rates fall immediately. And similarly, they should fall around the world. We should follow the interest rates.”

Trump, who nominated Powell for his role Fed chair In 2017, he has repeatedly criticized the Speaker for years. During his first term at the White House, Trump threatened Powell to set fire and called him “Bonehead”.

While Trump was campaigning to return to the White House last year, he criticized the Fed’s interest rate cut as “political” – although he said in June that he would not try to set Powell on fire and last month Repeated.

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The January Federal Reserve meeting is the first after the onset of the second term of President Donald Trump. (Sean / pool through photos of Reuters / Reuters)

Possible impact of Trump’s economic policies, including tax deduction and federal expenses and their plans for tariffs on imports, probably talk to the press on Wednesday after the Fed’s decision was announced.

Bank of America Global Research has written in a note to investors previewing the Fed Meeting in a note that they hope that the next step of Fed in Powell’s Post-Meeting Press Conference with the Central Bank plan to weigh Trump’s policies along with the policies of Trump -A plan will also be included to estimate the future rate cut. Stop further

“Pavel will probably be asked again about the Fed’s response to the Trump Policy Agend They should not, “Economists of Bank of America wrote. “But he will probably also note that some FOMC members (eg Waller and Williams) have already integrated the policy in their perspectives.”

Fed Minutes show that policy makers sees immigration, tariff shifts inflation causes uncertainty

Federal Reserve Chairman Jerome Powell has said that the Central Bank will give its decisions on the latest trends in economic data. (Liu ji / Xinhua Getty Image / Getty Image)

Earlier this month, FOMC released minutes of its December meeting, in which policy makers cited a high level uncertainty about the economic impact of possible changes in business and and immigration policy,

With frequent inflation in regular economic data release, that uncertainty suggested the process of the process Slow inflation Its 2% back to the target “may take more than already anticipated.”

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According to the CME Fedwatch Tool, the Fed Watchrs hope that Fed Watchrs hope that policy makers will reach a slow pace in 2025 to cut rates. As of Tuesday afternoon, the possibility of 68% was 68% for the next meeting of fed holding rates.



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