Despite the pressure from Trump: US Federal Reserve FED leaves Leifagin unchanged

Regardless of the vehement claims by US President Donald Trump after interest rate cuts, the US Federal Reserve keeps the key interest rate stable. The range is still between 4.25 and 4.5 percent, as the Central Bank Council of the Federal Reserve (Fed) announced in Washington. Market observers had already expected this – they assume an interest rate reduction at the meeting in September. The key interest rate is important for banks: You can borrow money from the central bank for this sentence.

This continues to put US Federal Reserve boss Jerome Powell against Trump, who is too high the current key interest scene. But because he doesn’t get what he is asking, Trump has repeatedly attacked the Fed boss verbally in the past few months and, among other things, insulted as a “fool”, “weak head” and “stupid guy”.

Trump wants a lower key interest rate to boost the economy in the United States. In addition, governments with low interest rates are easier to go into debt: According to an assessment of the household office of the US congress, the deficit will increase by around 3.3 trillion (around 2.8 billion euros) within the next ten years.

However, other arguments predominate for Powell: In view of existing inflation risks as a result of Trump’s customs policy, he relies on a prudent monetary policy and hesitates with interest rate cuts. Most recently, the economy and labor market in the USA also showed up, which is also no reason for a lower key interest rate.

Under Trump’s leadership, the United States has already threatened or established against a large number of countries-with consequences for the US population: only on Tuesday did the International Monetary Fund (IMF) obtain increasing import prices in the country. This indicates that companies begin to reduce higher costs to their prices. In the end, this means that the tariffs are worn by importers, retailers and ultimately by customers.

Trump had already threatened Powell’s dismissal several times. The hurdles for this are high: This requires an “important reason”. The question of whether a US president can relieve a central bank boss is not legal. Powell’s term of office will end in May. However, unlike Trump, Powell as the boss does not decide alone about the key interest rate – the Central Bank Council does that.

In the end, Trump was not too good to find new arguments for Powell’s dismissal or also to form: On a tour of the central bank, Trump said he alleged new figures on the increasing costs of the Federal Reserve’s renovation work of $ 3.1 billion. Powell visibly shook his head. When a letter from Trump handed over to him, the Fed boss stated: “This is a building that was already built. It was completed five years ago.” Later, Trump then agreed to new tones: Discharge was “a big step and I just don’t think it is necessary,” he said.