Unlock the White House Watch watch newsletter for free
Your guide on what the US elections of 2024 mean for Washington and Le Monde
Donald Trump strongly criticized the federal reserve just hours after the American central bank challenged the president’s calls to deep reductions in borrowing costs and the return of interest rates.
The central bank on Wednesday kept its principal interest rate At 4.25% to 4.5% and said he was now on break, the president of the Fed, Jay Powell, saying that the American prices “do not need to be in a hurry to adjust our position policy”.
Trump flew against the central bank on his Truth social messaging platform, saying: “If the Fed had spent less time [diversity, equity and inclusion]Gender ideology, “green” energy and false climate change, inflation would never have been a problem “.
On Wednesday, the unanimous decision of the Fed to have interest rates occurred only a few days after Trump insisted that the loan costs should drop “a lot” and promised to “make known” S ‘ He did not agree with the Central Bank’s decision.
THE Federal Open Market CommitteeThe Central Bank policies committee, said in its decision that US inflation remained “somewhat high” and eliminated a previous reference noting “progress” towards achieving its 2% objective . Powell later clarified that the changes reflected a “cleaning exercise” rather than a change in policy.
The Fed declaration “bowed a bit of a fellowship,” said Sarah House, senior economist at Wells Fargo. “This is a Fed which is less worried about the state of the labor market.”
The break followed three consecutive cuts – including a 0.5 percentage point decision in September – which down the target beach of federal funds from 2.25% to 5.25% to 5.5%.
Powell reported that interest rates would remain pending until the committee has more time to assess how Trump’s promises to increase commercial barriers, taxes and administrative formalities and undertake mass deportations would affect its efforts to cool inflation.
The president of the Fed said that the policies of the new administration were “not for us to criticize or rent”.
He also refused to react to Trump’s calls to the Fed to considerably reduce loan costs, saying that he “was not going to have a response or comment on what the president said” and that he had had no contact between him and the White House since the new president took office.
Eswar Prasad, professor at Cornell University, said: “This rate decision, which was really the only viable choice that the Fed had at this stage, will invite political pressure. The coming months will be extraordinarily difficult for the Fed if inflation remains sticky above its target level, while Trump drives intense pressure to reduce rates and reduce borrowing costs. »»
The American markets have largely made the Fed’s decision in stride, with state obligations under moderate sales pressure.
The two-year treasure yield sensitive to politics was 0.03 percentage points at 4.23% at the end of the afternoon in New York, while the reference yield at 10 years was stable at 4.55 %. Yields increase as prices drop.
In the stock markets, the S&P 500 was 0.5%lower. The heavy nasdaq composite of technology was down by a similar margin, after having reduced some of its losses during the Powell press conference.
