The United States Fed warns that Trump prices could increase consumer prices.
American consumers could meet increased prices if President Donald Trump proceeds at certain prices offered, such as the Pratient the American Central Bank.
The minutes of the federal reserve meeting, published on Wednesday, said that committee members feared that Trump policies could “hinder the disinflation process”.
“Trade contacts in a number of districts had indicated that companies would try to transmit higher contribution costs to consumers resulting from potential rates,” said the minutes.
The issuance of comments occurs in the midst of the criticisms directed against the Federal Reserve of Trump, which criticized the institution for not having reduced interest rates earlier, following the decision to maintain the rates during the January meeting.
The Fed minutes have also revealed “a high uncertainty concerning the scope, the calendar and the potential economic effects of the possible changes in commercial, immigration, budgetary and regulatory policies”.
“A couple of participants pointed out that, in the coming period, it could be particularly difficult to distinguish between relatively persistent changes in inflation and more temporary changes that could be associated with the introduction of new government policies” , added the minutes.
The report of the federal reserve indicated the central bank’s desire to maintain interest rates in the light of persistent inflation and uncertainties surrounding economic policy.
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During the January meeting, the central bank chose to maintain the stable key interest rate in the range of 4.25% to 4.5%, stopping after a series of discounts at the end of the ‘previous year.
Jerome Powell, the president of the Fed, previously pointed out that the bank is not “pressed” to implement other cuts, citing considerable uncertainty concerning the future trajectory of the economy.
Analysts provide that the federal reserve can only reduce the benchmark interest rate once in 2025, with a significant probability that no reduction occurs at all.
Trump’s campaign included promises to lower interest rates, aimed at relieving borrowers.
This has triggered discussions concerning its commitment to maintain the tradition of independence of the federal reserve, which is designed to guarantee that the institution favors the long -term health of the American economy in relation to political influences.
Powell previously told journalists that he had “no contact” with Trump and stressed that the decisions of the Federal Reserve on interest rates are motivated by the data.
However, surveys addressed to Powell concerning the Fed’s response to a new White House directive to eliminate diversity programs, as well as its withdrawal from an international coalition of central banks meeting to keep the institution isolated from pressures politicians.
Trump’s economic policies, in particular its proposed prices, reflect a reckless contempt for long -term stability. His desire to put pressure on the federal reserve for a drop in interest rates undermines the independence of the institution, prioritizing short -term political gain compared to economic prudence.
His erratic leadership creates an uncertainty in trade, immigration and budgetary policy, discouraging investment and growth. In addition, the retirement of its global financial coalitions administration indicates a dangerous isolationist position. By putting pressure on policies that could fuel inflation while ignoring the economic advice of experts, Trump may harm the very economy that he claims to defend, leaving American consumers and businesses to hear the consequences.