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The Federal Reserve Interest rates kept us stable Yesterday for the third consecutive meeting, withstand repeated calls to reduce the loan costs to President Donald Trump, who took the call to the call of the president of the Fed Jay Powell “M. too late”.
Political decision -makers said that “the risks of higher unemployment and higher inflation” had increased since their last meeting in March and that borrowing costs are expected to stay on break when they evaluated how Trump's aggressive increases would affect the largest economy in the world.
“There is still too much uncertainty about what the growth stroke will be, it will be the inflation and the moment at which all this happens,” said Tom Porcelli, an economist at Pgim Fixed Revenue.
During a press conference after the announcement, Powell warned that new commercial direct debits were likely to put the central bank in a position where both sides of its double mandate – promote maximum employment and taming – were disputed.
“It is really not clear what we should do at all,” he said.
Economists said monetary decision -makers were faced with an increasingly difficult battle to determine how and when to act.
“The Fed has gone from the engineering of a soft landing for the use of the nose economy, even if Trump is trying to requisition the wheel,” said Eswar Prasad, professor at Cornell University.
The “data dependent” approach to the Fed is also under pressure. Surveys have indicated that businesses and consumers in the United States are deeply concerned about how new commercial direct debits will affect their economic prospects. However, recent rear reports have continued to show that demand through the largest economy in the world remained largely robust at the start of the year.
The rate adjustment decision has also become hot in the heels of Stronger than expected job figures For April, which suggests that the labor market has remained on a solid basis despite abnormally high levels of uncertainty. Data prompted many economists to postpone their expectations concerning the next drop in American rates until the least September.
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The markets underestimate Trump's desire to maintain prices on some of the most important business partners in the United States, Dan Ivascyn, investment director at Bond Fund Giant Pimcotold Financial Times. (Free to read)
“People always believe that there are going to be ramps out of ramps (at the prices) and that we are going to come back to something that looks a little more like what he did on the day of” release “,” he said. “We are not so sure.”
The markets were shaken by the announcement of the Trump release day tariff in early April, but seem to have been calmed by his decision to suspend the samples a week later. Last Friday, the S&P 500 wiped out the steep losses that followed the announcement of the prices.
But Ivascyn said investors were mistaken in thinking that Trump's samples would be completely removed or made less energetic than expected previously: “Believe Trump. He believes in prices,” he said.
He also warned that new commercial levies could lead to a “more” stagflationist “scenario” for the greatest economy in the world, warning that the United States “may very well have a recession”.
Others, however, are more optimistic. The director general of BMW, Oliver Zipse, predicted on Tuesday that the 25% prices of Trump on the imports of foreign cars would be lowered from July.
“There are a lot of negotiations behind the scenes. And this leads to the hypothesis that (the prices) are rather temporary,” said Zipse. “We can see that our big imprint will not be ignored.”
