Federal Reserve open to cut rates under pressure from Trump
The United States central bank may cut interest rates under pressure from US president Donald Trump if inflation remains low until July.
The rates, however, would be kept steady for the month of June, the Federal Reserve announced Wednesday.
"The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective as the most likely outcomes, but uncertainties about this outlook have increased," said the rate-setting Federal Open Markets Committee (FOMC) in a statement. "In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion."
Only one of the 12 FOMC members did not support holding the rates steady for now.
“There was not much support for cutting rates now, at this meeting," Federal Reserve Chairman Jerome Powell said, adding that out of those promoting cuts, “all… but apparently one felt that it would be better to see more before moving.”
The US economy is facing risks mostly caused by Trump’s escalation of a globally harmful trade war with China, Powell suggested, citing the period of time from FOMC’s previous meeting in May.
"Our continued patient stance seemed appropriate, and the committee saw no strong case for adjusting our policy rate," Powell said. “In the weeks since our last meeting, those crosscurrents have reemerged.”
The US president said last week that it has been past the time the Fed should have cut the rates, complaining that he has waited “long enough.”
“I disagree with him entirely,” Trump said of Powell, claiming that the economy and the stock market would have grown faster “if we had a different person in the Federal Reserve that wouldn’t have raised interest rates so much.”
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