The Fed hopes Trump will maintain a stable fee despite demanding deep cuts

Federal Reserve System Bookings will be spurring the economy in the face of growing political pressure from the Trump administration, announcing its latest decision on Wednesday on whether to cut interest rates.

This week, the Fed is widely expected to leave interest rates unchanged, making it four consecutive meetings with the central bank unchanged. The benchmark federal funding rate is in the target range of 4.25% to 4.5% since the Fed’s last interest rate cut in December.

Central bank policymakers kept interest rates at that level due to uncertainty regarding the impact of tariffs on both sides of the double mission to pursue maximum employment and stable prices with a long-term goal of 2% inflation. Inflation fell from the 40-year high that the US economy experienced in 2022, but exceeds the Fed’s target.

president Donald Trump And Vice President JD Vance ramped up criticism of the Fed’s reluctance to cut interest rates, ridiculing Federal Reserve Chairman Jerome Powell as “too late” to push to influence central bank financial policy decisions.

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Trump said after a stronger than expected May report was released earlier this month Fed’s Powell Interest rates need to be reduced at full points to provide “rocket fuel” for economic growth.

“Too late” with the Fed is a disaster! ” Trump wrote in a post about True Society. “We had 10 interest rate cuts in Europe, and we had nothing.

Trump repeated his call for a full point cut last Wednesday after inflation data showed a lower than expected rise in the Consumer Price Index (CPI).

“CPI is just. Many! FRED needs to lower one all point. Trump wrote in a post about True Society.

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“The president has said this for a while, and that’s even more clear,” Vance said in a post on X last Wednesday.

Powell has repeatedly said the Fed hasn’t cut rates in a hurry, and it is monitoring risks to both sides of such dual missions. Resurrection inflation Or degradation of the labor market.

Trump administration Customs policyinjected additional uncertainty into the economy as consumer prices could rise in the coming months, although in some cases partially lagging, but in other cases, tariff rates are significantly increased.

“We need to see how this evolves,” he said at a press conference following the Federal Reserve meeting in May. “It may be appropriate for us to cut fees this year. It may not be and we don’t know.

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He also emphasized that the central bank group will be in charge of setting up. Monetary policythe Federal Open Market Committee is not going to make decisions based on politicians’ lobbying efforts.

At a press conference following the Fed’s decision to change interest rates in January, the chairman was asked about the comments Trump made. World Economic Forum It suggests he will “request” to lower the fees. Powell replied, “I don’t think he has any responses or comments about what the president said. It’s not appropriate for me to do so.”

The market is overwhelmingly predicting that the Fed will change on Wednesday, as it shows a 98.7% chance that the target rate will remain between 4.25% and 4.5% as of last Thursday. The Fed’s July meeting is considered a 23.4% chance of a reduction, in contrast to the 76.4% chance of a fee that is stable in its current range, which is considered a high chance of interest rate reduction.

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The Fed’s meeting in September is seen as an opportunity to reduce rates. Traders expect a 58.7% chance to be reduced by 25 basis points in the target rate, down from 4% to 4.25% range after that meeting.