The Fed did not yield to Donald Trump’s pressure and kept interest rates

The Federal Reserve (Fed) made deaf ears to the pressure of Donald Trump and this Wednesday kept the interest rates in 4.25-4.5%, as the market expected.

Anyway, monetary managers indicated that The indebtedness costs would still fall this year, although they see a slower casualties, by forecasts of a higher inflation for the new import tariffs of the Donald Trump government.

The quarterly economic projections of the Central Bank of the United States showed a slightly staplation scenario, with a deceleration of the 1.4%growth, a 4.5%unemployment rise and 3%inflation, much higher than the current one.

While those responsible for monetary policy still They plan to cut the rates half a percentage point this year, as they project in March and December, from there they slightly reduce the rhythm to a single cut of a quarter percentage point in 2026 and another in 2027, in a long effort to return inflation to the objective of 2%.

According to new projections, Inflation will remain high at 2.4% to 2026, before falling to 2.1% in 2027, in a practically stable unemployment context.

“The uncertainty about economic perspectives has decreased, but it is still high”, The Federal Reserve said in its last monetary policy statement, a modification of the May writing, at a more turbulent moment of the commercial debate.

The growth is expected to be 1.4% this year, compared to the rate of 1.7% of the last round of March projections, and that the unemployment rate ends the year at 4.5%, compared to 4.4% planned in March.

Until now, however, “the unemployment rate remains low and labor market conditions remain solid,” said the Fed in its statement, unanimously approved.

The text did not mention the sudden outbreak of hostilities between Israel and Iran or the risk that conflict supposes for world oil or other markets.

“The statement of the statement was much more constructive than May, since it pointed out that uncertainty decreased, but remains high (in May he had said that he had increased more). On the other hand, he indicated that the monetary policy committee is attentive to the risks with respect to both sides of the double mandate (in May they had indicated that the risks towards greater inflation and unemployment had risen),” they said from Balanz Research.

Donald Trump pressure

Meanwhile, the Fed continues to ignore the Trump’s request for immediate cuts of interest rates, A measure that the Central Bank officials consider that it would go against their effort to ensure that inflation returns to their 2% objective until tariff changes are completed and their effects are better understood.

Before the meeting, Trump called Powell “stupid” and said the official interest rate should be reduced by half, a measure that is usually reserved for serious economic emergencies.

The current Fed rate was set in December in the current range of 4.25%-4.50%. Those responsible for monetary policy have been reluctant to commit to a calendar for new cuts given the volatility of US commercial policy.