The Federal Reserve will announce its latest interest rate decision on Wednesday, and experts predict rates will stay the same. Market watchers give it a 99.9% chance that the Fed won’t change rates right now.
Trump Wants Rate Cuts
President Trump has been pushing the Fed to cut interest rates to boost the economy. He even called Fed Chair Jerome Powell a “numbskull” on social media for not lowering rates. However, the Fed operates independently from the White House and makes its own decisions.
Current Economic Picture
Since Trump took office, some economic indicators have changed:
- Inflation has cooled down to its lowest level since 2021
- Job growth has slowed but remains steady
- Recent inflation data showed a small increase in prices
The Tariff Challenge
The Fed is watching Trump’s tariff policies carefully. Powell has warned that tariffs could cause “stagflation” – when prices rise but the economy slows down. This puts the Fed in a tough spot.
Trump has recently backed down from some of his steepest tariffs, especially after reaching a trade deal with China. However, a 10% tariff still applies to most imports, though court rulings have put these in legal question.
The Fed’s job is to balance keeping inflation low while supporting employment, making this a delicate decision.
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