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The Federal Reserve has left us the interest rates in the queue and signaled that it is not in a hurry to adapt monetary policy and to defy President Donald Trump’s pressure to profound reductions in the credit costs.
The central bank kept its main actors on Wednesday interest rate At 4.25 to 4.5 percent and stated that it was now a break, and Fed chairman Jay Powell said that US interest rates “shouldn’t be in a hurry to adapt our political attitude”.
The unanimous decision came only a few days after Trump insisted that the loan costs should fall “a lot” and swore to “let it know” if he did not agree to the central bank’s decision.
The Federal Open Market CommitteeThe Central Bank’s Policy Fortress Department said in its decision that the US inflation was “somewhat increased” and initiated an earlier reference in which “progress” was identified to reach it 2 percent. Powell later made it clear that the changes rather reflect a “cleanup” than a shift in politics.
The Fed’s statement “is a bit Hawkish,” said Sarah House, Senior Economist at Wells Fargo. “This is a Fed that is less concerned about the status of the labor market.”
The break was followed by three consecutive reductions in a move of 0.5 percentage points in September, which fell the goal of the Federal Fund from a 23-year high of 5.25 to 5.5 percent.
Powell signaled that the interest rates would remain in the queue until the FOMC had more time to assess how Trump’s promises would affect the increase in trade obstacles, sloping taxes and bureaucracy and mass shifts that would have an impact on their efforts to cool inflation .
The Fed Chairman said that the new government’s guidelines were “not to be criticized or praised for us”.
He also refused to react to Trump’s demands for the Fed in order to significantly reduce the loan costs, and said that he would “no answer or comment on what the president said”.
“This installment decision, which was really the only practical choice that the Fed had at the time, will prove political pressure,” said Eswar Prasad, professor at Cornell University. “The coming months will be an extraordinary challenge for the FED if inflation remains sticky above its target level, even if Trump increases due to strong pressure on pressure to reduce interest and reduce the loan costs.”
The US markets made the decision of the Fed on the whole in the whole, whereby the state bonds were under moderate sales pressure.
The political sensitive two-year financing income in New York was 0.03 percentage points with 4.23 percent in the late afternoon, while the 10-year return of 10 years was 4.55 percent flat. The returns rise in the drop in prices.
In the stock markets, the S&P 500 was 0.5 percent lower. The technology-related Nasdaq composite was after a similar edge after trimming some of its losses during the press conference in Powell.
