The Federal Reserve on Wednesday has changed interest rates after the first meeting of the year.
“The committee determines that the risks to achieve the goals of employment and inflation are almost balanced. The economic outlook is uncertain, and the committee is a risk to both sides of the double mission. We are paying attention, “Fed wrote in a note.
Investors were primarily hoped that the Fed will be pause in the easing campaign after the Fed has reduced interest rates in full points last year.
Last month, Fed Chair, Jerome Powell, alerted him when policy proprietors needed more confidence than the inflation was cooled.
The Federal Open Market Committee meeting on Wednesday was the first time this year, the Trump administration's first meeting, and was facing the pressure from the president last week, all of the eyes are heading to Powell. 。 “
“I think you know it [interest rates] Last week, Trump said last week with an obvious excavation in Powell. “If I don't agree, I will let you know.”
When he was asked if he thought the Fed officials listened to him, Trump answered: “Eh”.
A few hours ago, Trump performed a video address in the World Economic Forum in Davos, Switzerland, and demanded an immediate decline in interest rates.
Trump has appointed Powell as the chair during his first term in 2017, but repeatedly criticized him and the central bank that he would not relax monetary policy fast.
During his first term, Trump called Powell and his Fed colleagues “Bone head” to keep interest rates.
“President Trump has already raised his desire to fall, expecting Jerome Powell to take care of political pressure and fees.”
On the other hand, since the president has begun to advance his tariffs and the promise of overseas expulsion, the potential impact on Trump's policy and economy is at the forefront.
Economists have expressed concern that harsh tariffs could reheat inflation, making it more difficult for the Fed to justify further interest rates.
“President Trump is working quickly to implement many of his desirable policies and promises of campaigns, saying in a memo, Melissa Corn, Vice President of William Ravis Morgage.
“It takes time to see how everything works in Washington and how a new policy affects inflation and the economy,” she added.
According to the CME Fedwatch tool, the Fed decision was widely expected.
Inflation has been significantly cooled to 2.9 % as of December compared to the peaks of the pandemic era, but stubbornly exceeds the 2 % goal of the Fed.
The unemployment rate fell from 4.2 % of the previous month to 4.1 % in December.
Prior to the December meeting, the policy creators were inheriting the possibility of reducing the rate of four in 2025, but this year it is now in the air that the central bank will lower the price this year as well. 。
“The major problem for the Fed is whether the rate reduction in 2025 is on the table at all. It is difficult to claim that the labor market is strong and the inflation is still sticky.” Said Laut.
In December, Powell added that many people had a better performance due to unemployment and inflation than many years ago, but it takes time for the inflation rate to be cooler than expected. He said, “I'm a little frustrated.”
