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The Federal Reserve has kept American interest rates pending for the third consecutive meeting, as officials underlined increasing concerns that President Donald Trump's prices will trigger a new gust of inflation and weaken the job market.
“The uncertainty about economic prospects has increased further,” said the Federal Committee for the Federal Markets of Policy on Wednesday, after having voted unanimously to maintain the objective of the federal funds at a range between 4.25 and 4.5%. The committee added that, since their last meeting in March, “the risks of higher unemployment and higher inflation have increased”.
FED officials have not reduced loan costs since December and have said they stay on a break when they assess the effects of Trump prices On the greatest economy in the world.
Several best central bankers have indicated in recent weeks that the contents of persistent pressure prices pressure will be an absolute priority. This point of view was reinforced by recent reports which showed that demand in the greatest economy in the world remained largely robust at the start of the year.
However, surveys have indicated that companies and consumers are deeply concerned about Trump's samples will affect their finances in the future. Business benefits have also shown that many business leaders find it difficult to provide for their sales and profits due to commercial uncertainty.
“The Fed has gone from the engineering of a smooth landing to the employment of the nosediving economy while Trump tries to requisition the wheel,” said Eswar Prasad, professor at Cornell University.
Guy Lebas, a fixed -income chief strategist at Janney Montgomery Scott, added: “I do not remember an era when the Fed improved the risks of growth and inflation as clearly.”
The Fed has maintained its patient approach despite repeated calls from the American president to reduce loan costs. Trump also launched attacks on President Jay Powell, calling him “Mr. Too late”.
The May's decision followed the publication of Non -agricultural payrolls stronger than expected The April figures, showing the American labor market, remain on a solid basis despite the uncertainty triggered by the Trump administration's trade policies.
Job figures have led many economists to postpone their expectations from the first Nourished Reduction of the rate until September at the earliest.
There was no immediate change in rate expectations after the decision of the Fed on Wednesday.
The American yields of the Treasury, which move reverse at a price, fell at their lowest levels of the day. The two -year yield, which moves with the expectations of interest rates, fell by 0.03 percentage points to 3.76%, which suggests that the central bank was less bellicist than the merchants had provided it. Stocks also dropped to their lowest levels of the day, the S&P 500 down 0.4% and the Nasdaq composite 0.9% lower.
Trump announced scanning prices on April 2, which if they were adopted would increase American trade barriers to their highest levels in more than a century. Most were interrupted for 90 days a week later.
While GDP contracted for the first time in three years in the first quarter, officials have written this to the distortions triggered by prices while American companies seek to get ahead of the samples by important goods.
“Although the oscillations in net exports have affected data, recent indicators suggest that economic activity has continued to develop at a solid pace,” said the FOMC.
