What a Trump, Powell faceoff means for your money
Later in this month, before the next Federal Reserve meeting, the tensions between the White House and the Central Bank reached the fire field.
On Wednesday, a senior White House official CNBC and other news organizations, President Donald Trump will soon fed President Jerome Powell’a said.
Trump later rejected these reports, but although he said he would “not exclude anything.”
Trump has repeatedly said that the Central Bank had to cut the lock comparison so far. On Friday, Trump called Powell “too late” because he did not reduce interest rates.
“It is too late, ‘and the Fed drowns the housing market with high rates, which makes it difficult for people to buy a house,” Trump wrote. Real social mail
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The President claimed that the preservation of a very high federal fund ratio makes it difficult for businesses and consumers to borrow and put the US into an economic disadvantage in countries with lower rates. The Fed’s criterion determines what banks charge each other for lending overnight, but at the same time there is a drip effect on almost all the borrowing and saving rates that Americans see every day.
Fixed mortgage ratios, especially do not follow the FED directly, but largely depend on the Treasury returns and the US economy. Tariffs and wider economic Drive Drive concerns are higher, mortgage rates follow the case.
Powell said on July 1, the FED will reduce rates so far, but Trump’s trade policies continued due to the uncertainty and inflation risks.
As of the last government reading, Consumer prices When it started to receive inflation from tariff -based, it remained higher in June.
Since December, the federal fund rate has been in a target range of 4.25-4.5%. According to the CME Group, the futures market pricing does not mean the chance to decrease interest rate when the FED meets at the end of July. Fedwatch indicator.
Even if the pressure of lowering rates increased significantly, Powell said that politics will not play a role in the Fed’s policy decisions.
‘A reflection of the flexibility of the economy’
Brand pricing shows that the FED is not likely to take into account the more interest rate deduction by at least September. When the FED fund rate decreases, consumers can see borrowing costs Also start falling.
“The Fed has been in December since December, the fact that the FED has been in December, the fact that it quit without changing interest rates is a reflection of the flexibility of the economy and the uncertainty about the inflation path.” He said.
“At the point where the FED ultimately reduces interest rates, we prefer much more than an economy caused by alleviating inflation pressure,” McBride said. He said.
For now, “Inflation is still higher than desired,” he added.
According to Mark Higgins, Senior Vice President in the Index Fund consultants, and “Investment in the US Financial History: Estimation of the Future” author, Mark Higgins, the very early reduction of risks can stop or reverse inflation.
“Now you have a situation that Trump’s Fed has less flexibility to do this, while you are willing to pressure lower rates.” He said. “They have to keep the rates higher to extinguish inflation.”
White House, tariffs will not cause illegal inflation, most of the costs of foreign producers in the expectation of sucking themselves, he said. However, many economists expect the full impact of tariffs on pricing to gather in the second half of the year with the decrease in excess stocks.
According to Higgins, for consumers waiting for borrowing costs, the FED may be better if it depends on the current monetary policy.
Higgins, “There is this attraction to move fast and this is inefficient.” He said. “If the FED reduces early rates, they will allow inflation to be revived and then they will have to increase the rates again.”
