The United States Fed leaves unchanged interest rates in the midst of economic uncertainty | Inflation

The United States Federal Reserve has left its unchanged reference rate despite President Donald Trump’s growing pressure to reduce rates.

On Wednesday, the Fed said that it would leave its short -term rate stable from 4.25% to 4.5%.

The Central Bank’s decision was largely in line with expectations and has not reduced interest rates since December.

The decision comes as decision -makers weigh the signs of an economy of weakening. Yesterday, American retail figures dropped more than expected in its report by the United States Ministry of Commerce. The report on unemployed complaints last week in the US Labor Department came to its highest level in eight months at 248,000.

However, The last job report have shown that the unemployment rate was stable at 4.2%, indicating that the labor market, while slowing down, remains quite stable.

“The committee seeks to achieve maximum employment and inflation at a rate of 2% in the longer term. Uncertainty about economic prospects has decreased but remains high,” the Central Bank said in a statement.

Powell pointed out that the labor market was not a source of major inflationary pressures and that the central bank held stable rates to respond to the uncertainty driven by Trump’s economic and immigration policies as well as consumer prices, a key inflation gauge for the federal reserve. The most recent report showed an increase of 2.1% for the month of April.

“We have seen the inflation of goods go up a little,” said Powell. “We expect to see more during the summer. It takes time to make your way through the distribution chain at the end of the consumer. We are starting to see effects and we expect to see more in the coming months,” he added.

Economists agree.

“While the Fed is pressure to evolve, the American economy turns out to be more resilient than expected. Current consensual growth forecasts for the United States in 2025 are only 1.4%. Given the reading of the most recent inflation of 2.4%, which would mean the lowest nominal growth rate since 2020. The next revision of American growth could be higher, and what awaits the world of Scott.

“The number of jobs is consistently better than expected. The Fed’s mandate is full employment and price stability. Although the risks both have been raised in the middle of political uncertainty, the weakness of the work or the acceleration of inflation simply does not present itself in the data. This is the focal point of the Fed’s calculation here. ”

“The president of the FED, Jerome Powell, has little urgent need to facilitate ease. But if a relaxation happened, it would have been extremely stimulating and would have lowered the interests of the American debt,” Michael Ashley Schulman, partner and investment director at Running Point Capital Advisors told Al Jazeera.

Political decision-makers are considering imminent changes and constantly change Trump pricing policies as well as increasing tensions in the Middle East. While oil prices were down before Israel’s attack last week against Iran and its reprisals, concerns about the closure of the Hormuz Strait as tensions increase Concern fed that prices could go up in the coming weeks.

Trump Critique Powell

Before the rate announced, Trump expressed his disappointment in the Central Bank’s decision to have stable rates in recent months.

“Powell is too late,” he said, referring to his desire for rate reductions. “I call him” too late Powell “because it is still too late. I mean, if you look at him, every time I did that, I was 100%right, he was wrong,” said Trump.

He added that he “may have to force something” but it is not clear what Trump heard by that.

He also suggested leading the central bank. “Maybe I should go to the Fed,” said Trump. “Am I allowed to name myself at the Fed?” I would do a much better work than these people. ”

Powell’s mandate is expected to expire next May, and Trump recently fell for his rhetoric on the dismissal of the Central Bank chief.

“What I am going to do is, you know, he goes out in about nine months, he must, he is fortunately dismissed … I would never have renamed him, (former president Joe) Biden has renewed him.

During the press conference, Powell responded to the flow of attacks. “All we do is at the service of our public mission,” he said.