Washington – The Federal Reserve will probably keep its original short -term interest rates unchanged on Wednesday, despite the many weeks of strong criticism and the demand for President Donald Trump that has been reduced to the cost of adoption of Fed.
After severe decreasing in the financial market two weeks ago, he said that he could dismiss Fed Chair Jerome Powell, Trump later supported and said he had no intention of doing so. Nevertheless, he and the Treasury Secretary Scott Besent say that the rate of Fed should be reduced.
They argue that inflation has been constantly cool and the cost of taking high orrow is no longer needed to raise prices. With the spread of inflation of the Pandemic-era, Fed 2022 and 2023 sharply enhanced its short-term rates in 2023.
Separately, Elon Musk, head of the Department of Government Skill in Trump, suggested last Wednesday that the cost of Fed should be more closely focused on the convenience of the Fed.
A higher investigation shows that the Trump administration has been under the threat of dismissing Powell, but Fed is still under abnormally intense political pressure despite its position as an independent company.
Nevertheless, the Fed will keep its original rate almost unchanged at about 4.3% after the Fed combined with Tuesday and Wednesday. Powell and Fed’s rate determined the number of 18 officers sitting on the committee that they want to see how Trump’s tariffs will affect the economy before taking any action.
Trump, however, said of the true social social media platform on Friday that “there is no inflation” here and claimed that the price of grocery and eggs had dropped, and that gas had dropped to $ 1.98.
This is not completely true: grocery prices have jumped 0.5% in two of the last three months and grew by 2.4% over a year ago. Gas and oil prices have decreased-a year ago, gas expenditure has decreased by 10%-long-standing trends have continued due to the fear that the economy will weaken in the economy. Nevertheless, AAA says gas prices nationwide are $ 3.18 gallons on average.
According to the Fed’s preferred gauge, it was 3.6% in the first three months of the year, though inflation was significantly reduced in March, although it is according to the Fed’s preferred gauge above its 2% target.
Except for tariffs, economists say that the Fed will soon reduce its criteria, as it is currently at a stage intended to take ing and slow and slow down inflation. Nevertheless, Fed can now not reduce the possibility of raising prices in the coming months with Trump’s broad tariff.
BNWI’s chief economist Vincent Reinhart said that the Fed was “injured” by what happened in 2021, when the supply of supplies has risen and other Fed officials have said that this increase will probably be “transitory”. Instead, inflation has risen to the top of 9.1% in June 2022.
This time they will be more careful, he said.
“This is a feeding that has to wait for the proof that it has to be slow to adjust to those proofs,” said Reinhart. ”
Also, Badging Trump’s Powell makes the Fed Chair reducing the rates more difficult because it will soon be seen as a nakuling under the White House, Preston Mui, an American appointment, said.
“You can imagine a world where the Trump administration does not have the pressure and they have cut the rates … soon they feel comfortable to create this argument that they are doing this because of information.”
On his behalf, Powell said last month that the tariffs would probably increase inflation and slow the economy, which is a complex combination for FED. The central bank usually will uphold them – or at least promote them – when unemployment increases, it will cut them to encourage the economy.
Powell says that the impact of the tariff on inflation may be temporary-but the price rise in a time-but recently recently said it “may be more endless.” It suggests that Powell will want to wait a few months of potential, to ensure that the tariffs do not increase the inflation before considering the rate decrease.
Some economists have predicted that Fed will not reduce the rates until its September meeting or until then.
Nevertheless, if feeding officers hit the economy enough to increase the cause of the tariff and unemployment, it can be removed quickly. Wall Street investors seem to expect this national result – they projects that the first cut will happen in July according to Future Price.
Separately, Kasturi criticized Fed for a cost of $ 2.5 billion for extensive renovation of two buildings in Washington DC on Wednesday
“Since at the end of the day, it is all the taxpayer meaning, so we must see if the Federal Reserve is spending $ 2.5 billion for their interior designer,” Kasturi said. “This is a eyebrow raiser.”
Fating officials have acknowledged that the cost of reform has increased as the cost of the building materials and labor has increased as the cost of post-scholars has increased. And ex -fed officials, speaking in the background, say that local rules forced Fed to expand more than the buildings, which increase the cost.
Meanwhile, Paul’s tenure to replace Powell as a chair after the expiry of the following year, former Fed governor and potential candidate Kevin Wars recently said that Fed attracted more investigations because of his failure to supervise prices.
“During the International Monetary Fund Conference in late April, he said in a speech,” Fed’s current wounds are mainly self-destructive, “he also condemned the Fed to participate in a global forum related to climate change.” The credibility loss, permanent change and the most important, worse economic results for our colleagues need to be reduced. “
Powell said on his behalf last month that “Fed freedom in Washington in Congress is very widely understood and supported, where it is truly important.”
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