The Fed kept the rate unchanged. But the show goes on 🍗
On June 18, the Fed maintained the rate, not giving the markets a signal for easing. The QT program (liquidity tightening) has also continued.
The wording is neutral, but the tone is getting tougher: Powell clearly indicated that the rate will not be lowered 'at Trump’s request'.
💬 Political background:
Trump once again lashed out at the head of the Fed, calling him a 'brake' and 'dull', demanded an urgent rate cut, and stated that he would have handled it better himself.
What did Powell respond?
• The rate remains,
• We are in no hurry to lower it,
• We await greater confidence that inflation is indeed decreasing,
• A new risk factor is the introduction of tariffs, which could drive prices up.
🔍 What does the Fed actually look at when making decisions?
• Inflation (CPI and Core CPI)
• Labor market (unemployment rate, non-farm payrolls)
• Economic growth rates (GDP)
• Personal Consumption Expenditures Index (PCE) — this is the main benchmark for inflation
Right now, all of this is in a borderline state — the numbers do not provide a clear reason for either easing or tightening.