Federal reserve delay. It maintains its rates between 4.25 % and 4.50 % since December. Donald Trump, however, does not want to wait. Required an immediate decline. Customs prices are enough for him to build an economy. The Fed wants to hide. Result: a ten -dated show between monetary independence and presidential will. The Fed’s meeting scheduled for this week promises to be electric. Markets hold their breath.
In short
- Trump wants the Fed to reduce rates to compensate for the effects of its customs surcharge.
- Powell refuses to act in a hurry and prefers to observe the development of real economic data.
- Voltage voltage of feeding, slowing consumption and weakening of short -term use.
Trump vs Powell: Open War
Donald TrumpPresident of a lover of Bitcoins, he doesn’t like waiting. Even less when it comes from Jerome Powell, the Fed owner. Since his return to the White House, his fist hit. Wants lower rates.
” No inflation, the Fed should reduce its level “, He wrote about social truth.
Powell remains stoic. He repeats that the Fed acts according to data, not by the presidential mood. However, the president will multiply the attacks.
Powell is always too slow and too bad.
Behind the scenes, Some even evoke his release. But Powell is his own choice. The name and then wants to release: Trump remains faithful to his torn logic. The context is special.
Inflation has slowed down but stagnate to 2.4 %. Unemployment is rising, markets are upset. And Trump wants to restart at all costs. For him, the drug is simple: lower rates, as in Europe.
Prices that change the situation
But Fed does not follow. And for a good reason. Customs prices stored by Trump complicate the situation. 145 % on Chinese products. 10 % at least for all imports. Even cocoa is surcharges. Target? Reindustrialize America and fill in the boxes. However, the immediate result is an increase in prices. And the voltage of consumption.
Loretta Mester, former fed Cleveland, Alert:
Customs duties at least slow down growth.
The risk of stagflation is set up. Soft growth. Imported inflation. Fragile tasks. Belinda Roman adds:
If the Fed now lowers rates, the markets will believe that they panic.
And if the markets panic, everything can get worse very quickly. Fed hesitates, so he delays. Powell even quotes Ferris Bueller: “ Life goes very fast ».
Maybe blink. Surely metaphor. We have to observe, he said. Do not snap the decision. But Trump is in a hurry.
Supporting characters, the duel continues
Economic land is not soothing. Unemployment increased by 4.2 %. Record permission in April. Stable inflation at 2.4 %, far from the top of 2022, but still unpleasant. Household trust collapses. The expectation index is 54.4, immediate recession.
Trump wants to face these characters and wants to act. Powell wants to wait. Mismatch becomes public.
Here are the key characters of the moment:
- 4.25 % to 4.50 %: the current rate maintained since December;
- 145 %: price imposed on Chinese products;
- 105 400: release recorded in April, record in post-cows;
- 54.4: Trust Index, lowest since 2011;
- 2.4 %: Inflation in March, stable since September.
For Trump, these signals require an immediate answer. For the fed they are Power patternsNo action. This shift feeds tension. And speculation is growing. Rate or status quo? Both camps remain in their positions.
Donald Trump had long dreamed of released Jerome Powell. And he never misses the opportunity to remember this desire. The pressure is intensified. But will the Fed keep the course in the face of this political offensive?
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Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.
