Jerome Powell keeps interest rate steady!
Washington, Jul 30 (EFE). –
Jerome Powell, the chair of the US Federal Reserve, stressed Wednesday that the Fed can keep the interest rate steady while waiting to see if President Donald Trump’s tariff policy pushes up inflation.
“For the time being, we’re well-positioned to learn more about the likely course of the economy and the evolving balance of risks before adjusting our policy stance,” Powell said.
“We see our current policy stance as appropriate to guard against inflation risks,” he added.
Powell noted that more clarity is emerging on Trump’s tariff policy.
“Higher tariffs have begun to show through more clearly in prices of some goods, but their overall effects on economic activity and inflation remain to be seen,” the Fed chair said.
On Wednesday, the Federal Open Market Committee of the Fed left interest rates in the range of 4.25% to 4.5%, although two of its members voted against.
At the end of its two-day meeting, the FOMC reiterated that it will closely monitor the implications of incoming information for the economic outlook, stating that if risks emerge, it will be prepared to adjust the stance of its monetary policy.
This latest announcement was made on the same day that the Bureau of Economic Analysis (BEA) reported the US economy had grown by 0.7% in the second quarter, following a 0.1% contraction in the first quarter.
US gross domestic product rose by 3% on an annualised basis, compared with an annualised decline of 0.5% in the first quarter.
President Donald Trump celebrated the rise and used it to urge Powell to cut rates.
Since beginning his second term in January, the president has repeatedly urged Powell to cut rates. In recent weeks, he has intensified his criticism with almost daily messages.
Powell has recently come under fire because, although the president cannot fire him for disagreeing with him on monetary policy, he can do so for just cause, which some argue could be found on the Fed headquarter’s renovation.
The renovation, which has run over by about 700 million dollars, has put Powell in the spotlight, with Republicans accusing him of mismanagement. EFE mgr/mcd
