In the midst of the Donald Trump’s government tariff policy and an increase in geopolitical uncertainty, the US central bank maintained its reference rates Between 4.25% and 4.5%, although it continues to bet on two cuts in the remainder of the year.
In a statement he added that “uncertainty about the economic perspective dropped but remains high,” while GDP will grow less than expected and inflation will be higher.
The Fed expects an upward GDP of 1.4% this year compared to 1.7% that foresaw in March and 2.1% in December 2024.
Inflation, according to the Central Bank, will be 3% and not 2.7% as predicted in March, according to an update of its economic forecasts presented at the end of two days of meeting of its monetary policy committee.
It also provides for an increase in unemployment to 4.5%, compared to 4.4% expected before.
Government pressures
Shortly after the Fed began on the second day of meetings this Wednesday, Trump pressured again for a rate cut already criticize the president of the Central Bank, Jerome Powell.
“Frankly, we have a stupid in the Fed, it probably won’t cut today,” Trump said in the White House.
“We have no inflation, just success, and I would like to see that interest rates would go down,” he added, before knowing the organism’s forecasts.
This is the fourth Fed meeting since Trump returned to the White House in January.
The American Central Bank has a double mandate: keep inflation and look for full employment, mainly increasing or reducing its reference interest rate, which acts as an impulse or a brake for demand.
Trump imposed in recent months minimal tariffs of 10% on most products that the United States imports and higher values to the importation of steel, aluminum and cars.
But they have not caused for now a generalized increase in prices, partly because Trump reduced or postponed the entrance in effect of the highest levies, and also because companies have supported their previous inventories not to transfer the cost to consumers.
In May, the consumer price index was 2.4% year -on -year, compared to 2.3% in April.
Economists expect it to take several months for Trump tariffs to be reflected in consumer prices, and the Fed is proceeding cautiously.
The consumer, engine of the US economy, seems in any case more attentive to its purse. An indicator published on Tuesday shows that retail sales backed 0.9% in May.
The military escalation in the Middle East complicates the bets. The moderation of inflation, of which Trump boasts, is due in large part of oil prices, but the current conflict can make crude oil prices fire.