The US Federal Reserve keeps interest rates unchanged – despite the fact that President Trump had loudly demanded a cut. Fed Chairman Powell emphasized the non-political status of monetary policy.
The US Federal Reserve keeps interest rates constant, thereby rejecting demands from President Donald Trump for a cutback. Monetary leaders Fed head Jerome Powell left the key monetary policy set at 2.25-2.5 percent.
At the same time, they announced that they wanted to be „patient“ in monetary policy decisions. This keyword is meant as an indication that the central bank is planning no further increases for the time being – but no cuts, as required by Trump. „As you know, we are a non-political institution,“ Powell told the press. Short-term considerations of a political nature would have lost nothing in the central bank’s decision-making. „We are comfortable with our monetary policy stance,“ said the head of the central bank.
There are „no strong arguments“ for abandoning the current key interest rate and moving in one direction or the other. The central bank, which has been heavily criticized by Trump for its aggressive increases from last year, is currently out of sight, while the monetary authorities in the euro zone still want to maintain the zero interest rate until at least the end of this year.
Trump puts pressure
The US economy could „go off like a rocket“ if the central bank cut key interest rates, the US president recently wrote on the short message service Twitter. The economy has the potential to do so if key interest rates are reduced by about one basis point and monetary policy eased.
However, currency watchdogs are currently quite satisfied with the economy, which they say is „solid.“ At the beginning of the year, the economy gained surprising momentum: gross domestic product (GDP) increased at an annualized rate of 3.2 percent. By the end of 2018, only 2.2 percent had jumped.
