The Federal Reserve (the US Central Bank) remained interest rates without change today, Wednesday, but pointed to the increasing risks of high inflation and unemployment, which increased the ambiguity of economic expectations in light of the bank’s facing the impact of the customs duties policies pursued by the administration of President Donald Trump.
Officials of the Open Market Committee at the Central Bank unanimously admitted the installation rate of 4.25-4.50%.
“The fog for economic expectations,” the committee said at the end of its two -day meeting.
The US consumer price index fell to 2.4% last March on an annual basis from 2.85 in the previous month.
The federal said in a statement that the recent indicators indicate that economic activity continued to expand at a strong pace, and the unemployment rate has stabilized at a low level in recent months, the conditions of the labor market remained stable, and inflation is still a little high.
The federal seeks to achieve maximum employment in the labor market and the inflation rate at 2% in the long run, and uncertainty has increased regarding economic expectations.
The federal indicated that he attaches great attention to the risks he faces and believes that the risk of high unemployment and inflation has increased.
White House’s economic advisor Kevin Haysit said last month that President Donald Trump and members of his team will study the option to dismiss the President of the Federal Reserve Jerome Powell, but President Trump retracted the matter after the market disturbances repeating his request to reduce the cost of lending, describing Powell as “always late.”
A periodic report issued by the Federal Reserve last month showed that prices are rising and economic activity began to slow down in parts of the country in light of companies and families seeking to adapt to the customs duties imposed by Trump with the aim of reshaping world trade.
Waiting for data
Powell explained in the middle of last month that the federal reserve is awaiting more economic data before changing interest, describing the recent fluctuations in the market as a logical result of the radical transformations in the customs definition policy.
“At the present time, we are in a good situation that allows us to wait for more clarity before considering any amendment to the monetary policy,” Powell added, noting that a difficult situation will exacerbate in which inflation rises due to customs duties while growth declines.
