President Trump’s promise to brake inflation has become more complicated after January Consumer price index (ICC) Warm than expected last week.
The report shook the markets, exercising actions on stocks while bond yields have skyrocketed, because investors have reduced expectations of a drop in interest rates, while some have even rekindled the possibility of an increase.
But regardless of a hike – a delayed drop in rate alone could put President Trump on a “collision course” with the Federal Reserve, warned the veteran economist Nouriel Roubini.
“Even simply keep them waiting will put [Powell] On a collision trajectory with Trump because Trump wants to reduce rates now, “said Roubini.” We already see these tensions, and they will accumulate. “”
Just before the release of inflation, Trump urged the Fed to reduce rates, displaying on Truth Social that reduced interest rates will “peer” with its price program.
His call at lower prices occurs despite the repeated repression of the president of the Federal Reserve Jerome Powell, who reported once again this week that he was not in a hurry to reduce interest rates. Speaking before the congress on Wednesday, Powell told the legislators of the House: “I would say that we are close but not there on inflation … We want to keep the restrictive policies at the moment.”
And while Powell has warned this week that “it would be imprudent to speculate” on the economic benefits of the prices, Wall Street remains skeptical about the political agenda of Trump. Roubini has doubled its warning that the policies proposed by the Trump administration – including prices – may turn around by adding to current inflationary pressures, while the chief economist of Moody’s analytics Mark Zandi warned Consumers “exhaust the burden”.
“Prices, protectionism, economic war with our friends and allies, as well as with China, are inflationary and reduce growth,” said Roubini.
And Zandi echoed the concerns that Trump prices will add to inflationary pressures, telling me that Trump’s pricing will feed higher inflation, increase interest rates and reduce economic growth – factors that “would complicate” ” future political decisions of the federal reserve.
Zandi sees this high risk after printing the ICC of January, which has shown that “disinflation ending” as prices increased in a number of sectors, including energy, food, cars and Used trucks and motor vehicle insurance.
“The broad nature of the price is increasing … This is something to fear when it comes to prices,” said Zandi on the morning of Yahoo Finance. “The disinflation that we appreciate is now over, and unfortunately, we are not quite back to the objective of the federal reserve, so it’s disconcerting.”
