US Fed sidesteps Trump’s push for further cuts, holds rates steady

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WASHINGTON: The US Federal Reserve has decided to keep its significant interest rate stable after President Donald Trump’s return, while he rejects more rates, rejecting his calls for deductions, after his return to his post. The policy meeting has been identified.

The Fed announced in a statement that policy makers unanimously voted to keep the feed benchmark loan rate between 4.25 percent and 4.50 percent.

The decision marked a break after three consecutive rates, which reduced the feed’s key loan rate to a full percentage point.

The “unemployment rate in recent months,” has been strengthened at a lower level, and the labor market conditions are solid, Fed said. “

It added that inflation is “somewhat high”, while removing a reference in the first statements of inflation, the bank’s long -term target progresses to the target of two percent.

The US Central Bank has a dual mandate from the Congress to work freely to deal with inflation and unemployment.

It mainly does it by raising or reducing its key short -term loan rates, which affects the cost of borrowing for consumers and businesses.

Most analysts agree that the US economy is running well well, which has strong growth, a largely healthy labor market, and a relatively low inflation that despite the Fed’s target Is above

According to CME group data, futures traders have seen the possibility of close to 80 % that the feed will extend its interval at the next rate meeting in March.

‘Definitely inflation’

Since returning to office on January 20, Trump has raised the threats of threats to impose sweeping taxes on US trade partners and deport millions of non -documentary workers later this weekend.

He has also said that he wants to extend the tax deduction and slash red tape on energy production.

Last week, Trump also raised his criticism of the Independent Fed and his chair Jerome Powell, which he had previously appointed to run the US Central Bank.

“I will demand that interest rates be reduced immediately,” he said, adding that if the feed did not take his thoughts on the board, he would put a “strong statement”.

Most – though not all – economists expect Trump’s prices and immigration policies at least mild inflation, which increases the cost of goods facing consumers.

“I think these policies are definitely inflation, which is just a question,” said Zindi, a Moody analytics.

“One of the biggest things (feed) in making the monetary policy (Fed) responds to what legislators are doing, and if they cannot deploy their actions. Cannot be changed, either not much.

‘Meaningful difficulties’

According to the minutes of the meeting, at the previous meeting of the feed, policy makers dial the number of deductions in this year’s expected rate to just two, in which they predicted Trump’s potential economic policies. I include some speculations.

Given the uncertainty about the impact of Trump’s policies on the US economy, analysts are now divided on the way they expect feed this year to expect how much they expect.

In a recent investor note, Goldman Sex experts said their baseline predicted for cutting in two quarters points, which assumed a lighter, a timely effect on inflation, ” The reduction has not increased and the door is left open. “

Barclays economists wrote, “We maintain our basic line that the FOMC will reduce the rates of 25 BP (twenty points) in June this year.”

Zindi, who is from Moody’s analytics, said he also expects a reduction in two rates at the end of the year.

But, he added, “There are meaningful difficulties here that the next step through feed cannot reduce the rate, its rate may increase.”