The president of the American federal reserve Jerome Powell and American president Donald Trump.
Craig Hudson | Evelyn Hockstein | Reuters
President Donald Trump Friday, called to the president of the Federal Reserve Jerome Powell to reduce interest rates, even if its Blitz price The markets were swirling and raised fears of an inflation rebound.
“It would be an ideal moment for the president of the Fed, Jerome Powell Post on social truth. “Energy prices are down, interest rates are down, inflation is down, even eggs are down 69% and jobs are up, all within two months – a large victory for America. Cut interest rates, Jérôme and stop doing politics!”
The Trump position occurs when the world's stock markets are selling strongly. The president's new price policy, unveiled on Wednesday, has raised concerns about a global economic slowdown.
New trade policies can also be an obstacle that prevents the federal reserve from cutting. The central bank interrupted its rate decreases during recent references, in part because progress on the reduction of inflation seemed to have reached platforms. The new prices could lead to a generalized increase in prices, at least temporarily, which further complicates the image of inflation.
Powell told Business Journalists in Arlington, Virginia on Friday, that the Fed was “well positioned to wait for greater clarity“Before making changes such as rate reductions. He also said that the prices announced were” much larger than expected “.
Market -based interest rates have already Suddenly this weekWith the US Treasury yield at 10 years old now below 4%. Treasury yields often drop when investors are concerned about a potential recession.
The movement on the term market of federal funds implies that traders now expect a drop in rates of 0.25 percentage point of the central bank this year, according to the CME's Fedwatch tool. During a meeting last month, central bankers projected only two rate reductions.
Trump has minimized concerns about this week's market volatility, comparing at a given time the reaction to a patient who is under surgical intervention.
Asked about these comments on Friday, Powell said: “I do a practice not to respond to elected comments, so I don't want to be seen to do so. It is simply not appropriate for me.”
Trump regularly commented on central bank policy during his first mandate as president and often disagreed with Powell. This led to speculations that he could seek to withdraw the Fed chair before the end of his mandate next year. Trump said in December that he does not intend to dismiss PowellAnd the president of the Fed said that he did not think that the president is legally authorized to do so.
The Fed has two main objectives in promoting price stability and maximization of employment. THE Mars non -agricultural pay report Liberated Friday showed a slight increase in unemployment at 4.2%, but the increase of 228,000 jobs was more than expected.
The Friday job report does not reflect any impact of the prices announced this week.
