The US Federal Reserve is keeping a watchful eye on Donald Trump's policies, opting to hold interest rates steady as it seeks to gauge the economic implications of his agenda. Fed Chair Jerome Powell expressed caution about commenting on Trump's plans for tariffs, immigration, and deregulation, emphasizing the need to observe their unfolding effects before making any judgments.
The US Fed eral Reserve Board is keeping US interest rates on hold as it awaits clarity on the economic implications of Donald Trump 's policies. Fed chair Jerome Powell expressed caution about commenting on the new administration's agenda, stating that it was not the purview of the central bank to offer praise or criticism.
Powell acknowledged the uncertainty surrounding Trump's plans for tariffs, immigration, fiscal policy, and deregulation, emphasizing the need to observe these policies unfold before assessing their economic impact.Powell and his colleagues are closely monitoring Trump's actions, particularly his threats to impose tariffs on imports from Mexico, Canada, and China. These tariffs, if implemented, would add to existing trade tensions and potentially fuel inflation. However, Trump's proposed tax cuts and deregulation could stimulate economic growth. The Fed is grappling with the complex interplay of these conflicting forces, acknowledging that the net effects of Trump's policies remain unclear.Powell emphasized that the current economic landscape differs from the conditions during Trump's first term, characterized by trade wars with China and Europe. Inflation is higher, trade relations are more volatile, and the range of possible outcomes is wider. While Powell declined to speculate on future rate adjustments, Fed watchers detected a subtle shift in the central bank's stance. The omission of the usual reference to making progress on inflation in the Fed's monetary policy statement suggests a slightly more hawkish inclination. While markets had previously anticipated potential rate cuts in March, the prevailing expectation now is that any further reductions would not occur until June, allowing the Fed to gather more data and assess the impact of Trump's policies
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