Washington – Federal Reserve Divided on Wednesday to maintain the standard interest price fixed, although there is criticism from the president Donald Trump And opponents from two senior officials.
The Federal Open Market Committee, the group that determines the borrowing rate overnight, voted 9-2 to stay waiting. The federal funds rate will continue within the limits of 4.25 % -4.5 %. The level determines what banks receive each other due to night lending, but it affects a large number of other rates throughout the economy.
However, the decision met opposition from conservatives Michel Buman, Christopher and Er, both of whom called on the federal reserve to start alleviating the recognition that inflation is under control and that the labor market may begin to be weak soon. This was the first time since late 1993 that many conservatives did not make votes on a modified decision.
After the meeting, only a couple’s change in how the committee visited the economic conditions.
“Although the fluctuations in clear exports still affect data, modern indicators indicate that the growth of moderate economic activity in the first half of the year,” The aforementioned document. “The unemployment rate is still low, and the labor market conditions remain strong. The inflation remains somewhat high.”
At the June meeting, the committee had a more optimistic view, saying that the economy “continued to expand at a strong pace.”
A statement on Wednesday said that the uncertainty about the conditions is “still high”, which is also a less optimistic assessment of June, which indicated that the uncertainty “diminished but is still high.”
The slower economy will enhance the argument for low interest rates, although the committee has stopped supporting this view.
“No decisions about September”
The markets were An overwhelming majority There is no procedure on prices, however The shares went to some extent after Federal Reserve Chair Jerome Powell He said At a press conference The committee has not yet determined whether the prices will be reduced at its meeting in September.
“We did not make any decisions in September,” he said. “We do not do it in advance. We will take this information in mind and all other information we get and we make our decision.”
He also explained that the central bank monitors the potential impact of definitions on inflation.
“Our commitment is to maintain long -term inflation expectations, and to prevent the price level for one time in the price level from the continuous inflation problem,” he said.
Traders expected to reduce the Federal Reserve in September, but after Powell’s comments, the possibility of reducing the quarter point decreased to 46 % of 64 %, according to what he said. CME Fedwatch tool. In June, federal reserve officials indicated slightly that they saw two groups in the total of this year. The committee usually includes 12 voters, but it was without the governor of Adriana Kojler at the July meeting.
“It is very rare when two conservatives oppose the FOMC meeting, but it was the most vulnerable division of the FOMC meeting today,” said Jack McCaine, the wallet manager at Brandiwin Global. “The defection driver was about the timing of price discounts, not the direction of policy modifications. It is not a big problem. The real influence of the opponents was Powell’s pulling towards the Duofish camp for the month of September.”
McNTyre said it expected the Federal Reserve to reduce in September, with the exception of any major surprises in July and August recruitment reports.
The news follows a remarkable extension of an entity with a significant impact on the economy, but those that often avoid the political battle, at least explicitly.
Trump paid to cut prices
Trump has called for Powell’s resignation and even the player with the legal idea to shoot him. Although he has greatly retracted the threat of Powell’s dismissal, the President has kept criticizing one of the former appointed, who now calls him “too late.”
The President suggested that the Federal Reserve will be removed from its standard price by 3 percentage points, which he said would reduce the costs of lead to the increasing national debt and help the complex housing market.
In addition to Hectoring on pricesTrump administration has Powell ripped up And the Central Bank to overcome costs on a A huge redesign project In two buildings of the Federal Reserve in Washington. Powell insisted that the abuses are not the product of mismanagement but rather the escalation of costs since the start of the project.
Wednesday brought more news that could affect the FBI course, despite the Trump Roma.
The Ministry of Commerce mentioned this GDP grown at an annual rate of 3 % In the second quarter, much stronger than expected. Although a lot of the main profit was pushed due to a disturbance of a huge import in the first quarter before Trump’s tariff, the report strengthened the idea of the economy that is still on solid ground.
Moreover, the report showed that inflation works at a rate of only 2.1 % for this period, according to the main prediction tool at the Federal Reserve. The basic inflation was slightly higher at 2.5 %, but both numbers decreased from the first quarter levels and near the Fed Bank Ghost by 2 %.
“We in the 100 % White House respect their independence, but we also want to respect their analysis,” The director of the National Economic Council, Kevin Haysit Wednesday on CNBC. “We expect the Federal Reserve to catch up with data soon. This will be a really big positive story.”
The next Federal Reserve will meet its annual decline in Jackson Hall, Wyoming, in late August. Historically, it has shown a major speech of politics from the president.
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