US central bank puts policy adjustments on hold amid tariff-driven inflation fears
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Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a closed two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 2, 2022. — Reuters
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Chicago: The US Central Bank has said it prevents any changes in interest rates, as the concerns increase that increasing revenue during weight on economic growth can increase inflation.
US Federal Reserve Chair Jerome Paul said Wednesday that the feed will wait more data about the direction of the economy before changing the interest rates, and the Trump administration’s tariff policy has the characteristics of the recent market volatility as a logical response to dramatic changes.
“Currently, we are well positioned to wait for more explanation before considering any adjustments in our policy stand,” Paul said in a remarks created by the Chicago Economic Club.
Its remarks mention a potentially difficult situation for the feed, in which inflation is pushed over through revenue, while growth – and possibly the job – weakens.
Fed tries to keep inflation stable at 2 % while also maintaining more jobs.
“I think we will be away from these goals, maybe this year’s balance. Or at least no progress,” said Paul, as compared to the most stringent scenarios in the initial feed planning, at least, citing the effects of the minimum declared revenue. He said that the United States started the year’s full job and will continue to fall on the central bank’s target with the expectation of inflation.
Paul said that this approach has now become extremely uncertain, with “fundamental changes” in the policy, which does not offer a clear similarities to study businesses and economists.
In his first public remarks about the recent financial volatility, Paul said he felt that bonds and stock markets were working well, with security values reflecting investors to adjust to new landscapes.
Asked if there is someone “fed” – where the central bank will step into it if the markets decline – Paul said, “No, with its explanation … what the markets are happening … the markets are struggling with a lot of uncertainty and that means they are working like fluctuations.”
US stocks go down the session before Powell speaks, then expand their losses.
“I think Paul was expecting to be neutral and he was instead of Hakash,” said Jim Carol, senior Wealth Advisor of the Ballist Rock Private Wealth in Charleston, South Carolina. “When asked if there was anything like a feed for the stock market, the answer was ‘no’.”
Accelerated uncertainty
In its remarks made, Paul said that the US economic growth appears to be slowing down, consumer costs are increasing slightly. A rush of imports to avoid revenue is also likely to weigh in the overall domestic product estimates, which damage emotions.
“Despite uncertainty and negative threats, the US economy is still in a solid state,” Paul said. But “data so far shows that the solid pace of last year has slowed the growth in the first quarter.”
External analysts have continued to reduce growth during the year, while “households and businessmen have reported a rapid decline in emotion and has promoted uncertainty about this approach, which reflects widespread trade policy concerns,” said Paul, while President Donald Trump said.
The Fed Benchmark interest rate is currently between 4.25 % and 4.5 %, where it remains since December after the last year’s end.
Since then, inflation’s progress has been slowed in 2 % of the target.
Despite the uncertainty of Trump’s prices announcements and the nature of the rear, the decision on their potential impact will have a central position in whether the benchmark interest rate is not changed, it has to be reduced-or even the rate hike will be considered.
“Inflation is more likely to rise in inflation, Paul said,” The effects of inflation can be even more permanent. ” A purpose feed officials have begun to emphasize, “Avoiding the results will depend on the volume of effects, how long it takes time to pass the prices completely, and eventually anchor the expectations of long -term inflation,”
Although inflation expectations in short -term periods due to prices have “increased significantly”, Paul said long -term expectations that are in line with feed watches in the purpose of feed inflation.
Fed also looks at the job, Paul said the labor market is “solid” and “maximum job near or around.”
But should the feed be trapped between rising inflation and unemployment rates, “we will consider how far the economy is from every purpose, and possibly different times the horizons that will be expected to close these relevant spaces.”
