Fed holds rates steady, cites rising inflation risks amid Trump policy uncertainty

#Fed #holds #rates #steady #cites #rising #inflation #risks #Trump #policy #uncertainty

WASHINGTON: With no change in interest rates on Wednesday, the Federal Reserve said the risk of unemployment and inflation has increased, and it further confused the US economy as its decision -making President Donald Trump dealt with the effects of prices.

Fed Chair Jerome Powell said it was unclear at the moment whether the economy would maintain its current rate due to increasing uncertainty and increased inflation.

“Trump will ultimately decide whether the decision will be made and what will be avoided by possible court and political battles,” Paul said at a press conference at the end of a two -day policy meeting. “So it is not clear what the appropriate reaction to the monetary policy is currently … it’s not really clear what we should do.”

“I don’t think we can say how it will be killed.”

The US Central Bank, a key actor in the formation of the economy, was a subtle way of saying, unless Trump’s clean policy agenda had a full impact.

Fed’s policy statement, which kept the nighttime rate stable at 4.25 % -4.50 %, noted that since the last meeting of the central bank in March, “uncertainty about the economic outlook has increased further,” and the risks are increasing that both inflation and unemployment may increase.

Jeffrey’s chief American economist Thomas Simons said that since the Fed’s meeting on March 18-19, the language has been so obstructed, and how unexpected this view has become.

“All ‘Liberation Day’ Tariff News, the announcement of the delay of April 90 April 90, back on the headlines, back on trade deals and revenue exemptions, and the resulting in the business and consumer survey has made it impossible to decide that it has made it impossible to decide.”

Fed’s face is suspicious

Fed’s statement, and many of Paul’s comments, were also assured about the continuous flexibility of the economy, which has the benefits of employment and the economy is still growing “solid pace”. Paul said that the recent decline in total domestic production was reported in the first quarter, which was identified by a record rush of imports as businesses and households tried to run the expected import taxes from the front, in which domestic demand measures are still increasing.

But even the figures showed suspiciousness to the feed. Front loading rush to buy goods and stock shelf will not likely be repeated, and it is unclear whether all demands and investments below it are starting to weaken-and this will eventually reveal itself in the “tough” data related to inflation and jobs.

Fed’s own “Khakasteri book” about the economy has recently presented a picture of suspended business deals, demand and rising prices.

“Businesses and households are concerned … and various types of economic decisions postpone,” said Paul. “If it continues and nothing happens to address these concerns, you will expect it to appear in economic data.”

However, the Fed cannot respond, unless it is clear how the economy is axis, and how to assess the risks of its two purposes to keep inflation up to 2 % and maintain maximum employment.

“The current stance of monetary policy is positioned in a timely manner to respond to potential economic progress,” said Powell, “said Powell.

After the release of the Fed’s unanimous policy decision, US stock prices increased and that day ended. Treasury production declined, while the dollar gained against a curb of currency.

‘Fed awaits uncertainty to clean up’

The direction of the feed policy will depend on which of the risks of employment and inflation, or, in more difficult consequences, whether inflation and unemployment increase together and force the central bank to choose which threat is more important to meet with financial policy.

A weak job market will usually strengthen the issue of deduction. More inflation will call for monetary policy to be tight.

Ashish Shah, Chief Investment Officer of Public Investment in the Goldman Sex Asset Administration, said, “Waiting for uncertainty as feeding is awaiting uncertainty,” he added, adding that “recent improved job data has supported the feed on the Fed’s on -hold.”

Since December, the Fed policy rate has not changed as officials strive to assess Trump’s prices, which has increased inflation and economic growth this year.

When policy makers last updated their economic and policy estimates in March, they expected to reduce the benchmark rate by half a percent by the end of this year.