US Federal Reserve Ignores Trump Threats, Keeps Rates
The US Federal Reserve’s kept fed fund rates unchanged as the monetary authority highlighted the risk of higher unemployment and inflation. The decision contradicts US President Donald Trump stance on interest rates.
Trump had earlier slammed Jerome Powell, the US Fed chair that he is not doing a good job. Powell has refused Trump interest rates cut since the beginning of the year.
Federal Open Market Committee minutes reads that, “Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.
“The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further.
“The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen”. Fed said in support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent.
In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee said it will carefully assess incoming data, the evolving outlook, and the balance of risks.
“The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook.
“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
“The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments”. #US Federal Reserve Ignores Trump Threats, Keeps Rates Selloffs: Nigeria’s Sovereign Eurobond Yield Rises to 10.6%
