The delay in the Arab Chinese tariff gives a new reason to sit on prices

By Howard Schneider

WASHINGTON (Reuters) – The federal reserve has obtained another reason to wait for the reduction in interest rates after delaying the most punitive definitions imposed in the Trump administration’s commercial battle with China seems to reduce the chance of the American economic slowdown that would force the central bank to rush to rescue by reducing borrowing costs.

With the high revenues of American bonds and the future of stocks indicating the high stock prices, the contract traders associated with the standard interest rate made by the Federal Reserve have paid bets to reduce the initial prices until September, and now they only see a reduction of half a point by the end of the year.

The rise in the dollar after the announcement that customs duties will be reduced at the present time, all equal things, help in inflation.

Last week, the Federal Reserve kept its goal for short -term borrowing costs in a range of 4.25 % -4.50 %. Federal Reserve Chairman Jerome Powell said that with a few signs that the customs tariff slows the labor market, but inflation is still higher than the goal of the Federal Reserve 2 %, the right step at the present time is to maintain the prices in which there is more clarity.

The markets expected the Federal Reserve to see a need to reduce by July, and a total of 3 discounts in the interest rate throughout the year, based on the trading in futures contracts that settle on the Federal Reserve Policy. These expectations have turned after the United States, and the Chinese negotiators said they would determine the raising of the initial tariff for 90 days while discussing a more comprehensive deal.

City analysts said that the United States, which rises to 30 % in definitions that amounted to 145 % on Chinese imports “greatly reduces the risk of goods and high inflation.” “The federal reserve can now remain” sick. “

(Participated in the reports of Howard Schneider; edited by Nick Ziminski)