On Wednesday, US President Donald Trump urged the Federal Reserve to reduce interest rates, to reduce the repercussions of the customs duties imposed and sparked inflationary reactions.
This call came from the US President after the central bank decided to keep interest rates unchanged at 4.25% – 4.5%.
“Do the right thing.” Trump wrote on his platform Trump.
The US Central Bank postponed reduced interest rates, reduced its expectations for growth, and raised its expectations for inflation.
The effect of Trump fees
In a related context, the President of the Federal Reserve (the US Central Bank), Jerome Powell, said that the customs fees adopted by President Donald Trump would obstruct the progress to reduce inflation this year.
Powell said in a press conference, after the central bank kept interest rates unchanged, that it would be difficult to determine the percentage of inflation of commodity prices attributed to customs duties and the percentage of its enlargement resulting from other factors.
But he pointed out that the opinion polls of business and families are increasingly showing concerns about inflation and its expectations in the near term, although these expectations in the most distant period seem to be “generally stable”.
“I think that with the occurrence of inflation associated with customs duties, the progress of the progress may be obeyed” to reach an annual average of the bank at 2%, “Powell said.
Currently, indicators of Trump’s impact of customs duties on policy are still unclear, but many will depend on the speed of the movement of any enlargement linked to customs duties through the economy and the stability of inflation expectations.
Powell said that strong inflation readings in the past two months have been unexpected, but it may be caused by people’s demand for purchase before the imposition of customs duties.
He stated that the central bank is working hard to monitor these effects, but he made it clear that there is a lot of “noise” surrounding and postponing customs advertisements.
