President of Trump’s forehead and leader continues to offer US Federal Researchers’ Bank Powell and leaves the guiding interest rate unchanged-despite all the insults of Trump, who repeatedly demanded that the loan costs rapidly reduce.
The key interest rate in the world’s largest economy remains unchanged at a relatively high level. The US Federal Reserve (FED) US Federal Reserve left it in the range of 4.25 to 4.50 percent. This was announced in the evening after their regular interest session.
For the fourth time in a row, the monetary politicians around Fed boss Jerome Powell have opposed the demands of US President Donald Trump to reduce the key interest rate. This has been at the comparatively high level since last December. This decision was widely expected at the financial markets.
Trump had repeatedly criticized the central bank for its interest rate and questioned its independence. He attacked Fed boss Powell personally several times. Just a few hours before the interest decision, Trump had explained that he was “a stupid person” because he obviously did not want to lower the key interest rate. The Republican pondered whether he should not appoint himself as head of the US Federal Reserve.
Inflation recently less than expected
“We have no inflation, we are just successful, and I would like to see that interest rates are falling,” said Trump. Most recently, the US President had even called for a large interest rate of one percentage point.
An interest rate reduction would improve the financing conditions of the companies and stimulate economic activity. The youngest geopolitical crises could also speak for a support for the economy through lower interest rates.
In fact, the latest economic data indicated that the US economy cooled down, while the inflation rate was lower than expected at 2.4 percent in May and did not show the feared effects of the massive threatened or imposed customs increases.
This weakens the argumentation of the Fed, which repeatedly cites the risks of price stability as an essential reason for their stills.
Further interest reductions in sight
All the more excited, observers at the financial markets the latest inflation and economic forecast of the Fed and the monetary policy outlook derived from it.
The monetary authorities are now expecting a higher inflation rate of 3.0 percent this year. In March they still assumed an inflation rate of 2.7 percent. At the same time, they lowered their growth forecast from 1.7 to 1.4 percent. The uncertainty about the outlook had decreased, but stayed up, the central bank said.
In the effect, the Fed’s interest rate was retained: Most of the central bankers expect an interest rate level that can be used to close two interest rate cuts this year. This message was initially relieved at the financial markets. You can now expect a first interest reduction at the next central bank meeting at the end of July.
