US Fed Meeting Highlights: Last week, during a rare but tense visit to the Fed's headquarters in Washington, Trump had once again pressed the case for lower rates, though he also said he didn't think it was necessary to fire Powell.
Us Fed Meeting Highlights : US Federal Reserve kept key short-term interest rate unchanged on Wednesday, despite weeks of harsh criticism and demands from President Donald Trump that the Fed reduce borrowing costs.
The Fed was widely expected to leave its benchmark interest rate in the 4.25%-4.50% range at the conclusion of a two-day policy meeting. Fed chair Jerome Powell had earlier said the Fed should wait for more data before adjusting rates.
Last week, during a rare but tense visit to the Fed's headquarters in Washington, Trump had once again pressed the case for lower rates, though he also said he didn't think it was necessary to fire Powell.
The majority of Fed policymakers, though, remain concerned that Trump's tariffs could undo progress on bringing inflation back to the central bank's 2% goal, outweighing for now worries about the labour market.
The trade deal struck between the U.S. and Japan last week, with tariffs set at 15%, and reported progress for a similar rate in talks with the European Union make it more likely that import duties overall will end up well below the punishing levels Trump announced on his April 2 "Liberation Day."
Even so, U.S. tariffs are at their highest level in 90 years, and the effects are starting to show up in household purchases. A surge in prices of goods like furnishings and apparel helped drive overall consumer inflation to an annualized 3.5% pace in June.
So soon after a bout of 40-year-high inflation, policymakers fear fast-rising prices could "freak out" households, as Chicago Fed President Austan Goolsbee sometimes phrases it, triggering a wider inflationary spiral.