President of the United States Federal Reserve Jerome Powell | Photo credit: Reuters
The interest rates of the hero of the Federal Reserve officials are stabilized for a third consecutive meeting and emphasized that they see a growing risk of higher inflation and an increasing unemployed.
“The uncertainty about the economic perspective has increased even more,” said the Federal Committee of Open Market in a statement on Wednesday at the end of a two -day meeting in Washington. “The Committee is attentive to the risks for both sides of its double mandate and judges that the risks of greater inempleant and major inflation have increased.”
Officials unanimously voted to maintain the federal reference fund rate in a range or 4.25 percent to 4.5 percent, where it has the leg since December.
The S&P 500 index of US shares and treasure yields fell after the ad, while the dollar reduces profits.
The commercial policy of President Donald Trump has unleashed a wave of uncertainty throughout the economy. While the encumbrances are still negotiating, economists widely expect expansive tariffs to increase inflation and weigh on growth. That would face the two objectives of policy formulators: price stability and maximum employment, with each other.
President Jerome Powell will hold a press conference with journalists at 2:30 PM in Washington.
With inemploying even low and a stable demand, Fed officials have said they feel comfortable without changes until they have a better understanding of where the economy is directed. However, Trump has repeatedly said that the Central Bank should reduce loan costs.
Powell and his colleagues are determined to prevent tariffs from generating a persistent increase in inflation, and several officials have pointed out that they would not support Loine’s interest rates prescribed to protect against a deceleration economy.
Economic image
The recession has grown, and some companies have reported to stop investment decisions given uncertainty. Even so, the labor market is still resistant, and employers add 177,000 jobs in April. Fed officials described labor market conditions such as “solids”, according to the declaration.
Economists say it will take time for the full effect of new tariffs to work through the economy. Until now, the impact has mainly included a strong decrease in feeling and an increase in imports. The US economy contracted at the beginning of the year for the first time since 2022, but an underlying demand meter remained firm.
“Although changes in net exports have affected the data, recently indicators suggest that economic activity has continued to expand at a solid pace,” the statement said.
Companies rushed in the first quarter to import goods before rates, and an increase in consumer spending in March suggested that households also sought purchases in the first instance. The key inflation meters cooled in the month.
Meanwhile, Trump has increased his criticisms or Powell in recent weeks. At one point, Trump said in a publication on social networks “Powell’s termination can’t get quick enough!”
But the president has insisted since then he has not intended to say goodbye to Powell.
The Fed said it would continue to reduce its balance to the reduced rhythm announced at the March meeting. The monthly limit for the amount of treasure values that can mature without reinvesting at $ 5 billion, while the limit of values supported by mortgages also did not change to $ 35 billion.
The Central Bank announced Tuesday that Kansas President City Fed, Jeff Schmid Wolde, strange the May meeting due to his wife’s recent death. Kansas City was represented by the first vice president Kim Robbins. Schmid’s vote was approved to the alternative member Neel Kashkari, president of the Fed of Minneapolis.
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Posted on May 8, 2025
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