The federal reserve holds interest rates for the fourth time, despite the disturbance of the customs tariff
People and companies in the United States have faced a whirlwind of changing politics in recent months. But one thing is fixed: borrowing costs set by the US Central Bank.
The federal reserve held this strategy on Wednesday, leaving the main interest rate unchanged, even with the deterioration of the expectations of the officials of the economy.
The fourth consecutive decision is without procedure, while maintaining the bank’s influential lending rate hovering about 4.3 %, as it has stood since December.
This came despite the expectations of policy makers, which indicates that they expect slower growth, high unemployment and faster inflation than they did just a few months ago.
The Federal Reserve usually reduces borrowing costs if it is believed that the economy is struggling and raising if prices start to rise very quickly.
President Donald Trump has repeatedly called on the Federal Reserve Bank to reduce interest rates, while pushing significant changes in economic policy, including raising definitions on goods from all over the world.
Federal reserve officials, who are enabled to set interest rates independent of the White House, said they are concerned that one -time jump in prices because of these new drawings can turn into a more stable problem.
Inflation, the speed of price increase remains, is 2 % higher than the Federal Reserve goal, and comes 2.4 % in May.
Jerome Powell, head of the Federal Reserve, said that the bank has been prepared due to the high prices of prices more quickly in the coming months, as companies begin to transfer the cost of import taxes to their customers.
“It is very difficult to predict this process,” he said, noting that it will depend on the size and duration of the definitions.
“For this reason we believe that the right thing to do is hold what we are.”
He said that the bank can bear the waiting, noting that the economy in general has been “solid” and that the unemployment rate is still low at 4.2 %.
But the expectations issued by the Federal Reserve showed that policymakers, on average, expected growth to slow 1.4 % this year, a decrease from 2.5 % last year and 1.7 % were expecting in March.
Expectations call for approximately 3 % enlargement, an increase of 2.7 % expected in March and the unemployment rate to 4.5 %.
Increased price discount expectations in 2025 have not changed significantly, as the majority of members still expect rates to decrease slightly less than 4 % by the end of the year.
But expectations expect a little higher rates in 2026 and 2027, which was previously expected.
On the observations on Wednesday before the Federal Reserve’s decision, Trump reiterated his criticism of the height, describing him as “stupid” and “very late” to act, while speculating at the end of his term.
The European Central Bank has reduced interest rates eight times since last June. The Bank of England reduced borrowing costs last month, but it is expected to keep fixed rates this week.
But Isaac Steel, the investment manager of the Wealth Club, said that Trump may “talked about himself in part of the link”, where the Federal Reserve remains committed to the waiting and vision approach.
He said: “Central bankers tend to protect their independence with jealousy, which means that unless there is a convincing reason to reduce them, they may remain on the fence.”
Federal reserve interest decisions determine what banks receive to obtain short -term loans.
This rate in turn has a major impact on borrowing costs throughout the economy, and ultimately informing regular banks imposing fees on families and companies for mortgages and other types of loans.
By 4.3 %, the standard interest rate of the federal reserve coach remains significantly higher than it was between 2008 and 2022, when the bank began raising response rates to high prices.
But it is almost lower percentage than it was last year.
