TRUMP “DEMANDS” LOWER RATES
Trump has frequently criticised the Fed, which has a dual mandate from Congress to act independently to tackle inflation and unemployment.
After returning to office on Monday, he renewed his attacks on the US central bank.
“I’ll demand that interest rates drop immediately,” the real estate mogul-turned-president said on Thursday, later adding that he would “put in a strong statement” if the Fed – led by chair Jerome Powell – did not listen to his views.
“I think I know interest rates much better than they do,” he added. “And I think I know certainly much better than the one who’s primarily in charge of making that decision.”
Trump’s public criticism of the Fed and Powell – whom he first nominated to run the US central bank – is unusual, and runs counter to the policy pursued by most recent presidents of avoiding public criticism of the institution and its policymakers while in office.
“The Fed will not front-run any policies by the new administration,” Swonk from KPMG said of the bank’s upcoming rate decision.
“They will wait and see how they play out and how they actually affect the economy.”
TARIFF INFLATION CONCERNS “OVERPLAYED”
The Fed’s expected pause comes against the backdrop of a small uptick in inflation, with a relatively robust labour market and strong economic growth.
In December, Fed policymakers dialled back the number of rate cuts they expect in 2025 to a median of just two, with some incorporating assumptions about Trump’s likely economic policies into their forecasts, according to minutes of the meeting.
