this Fed Wednesday cut interest rates by a quarter-point to strengthen the president’s indomitable pressure trump cardhe installed a key ally in the central bank.
yes Fed Top-notch cuts within nine months and lower the benchmark rate to the 4% to 4.25%. this Fed It also shows that more reductions may be proposed before the end of the year (probably in 2026).
The vote for layoffs was 11-1, and the only dissident was Mr. Trump’s Stephen Miran, top economic adviser, sworn in Fed Mr. Board of Directors trump card Not long before the two-day meeting began. Mr. Milan advocated a reduction of a little.
gentlemen. Trump’s Two other appointees on the board, Michelle Bowman and Christopher Waller, voted to lay off employees.
main reason Fed Reduced borrowing costs are a concern for the slow-working job market. According to the Labor Department, the summer job growth is anemia, with employers hiring 29,000 workers a month in the three months ending August.
“In the short term, the risk of inflation is tilted to the upward space and has the risk of disadvantages: a challenging situation,” Fed Chairman Jerome Powell said in a press conference.
Mr. Powell called the labor market “unusual” and noted that fewer companies were employed, but because of Mr., there were fewer workers. Trump’s Immigration suppression.
Revised figures show that since December 2020, when the country was in the 19th pandemic, the economy lost its job in June.
Since January, employers have employed less than 17 million workers since 2010. The slow workforce has been the source of Mr.’s shock. trump cardhe ran for the economy after inflation rose under President Biden.
The bank’s tax cuts show its concerns about inflation. Trump’s Tariffs have regressed, fearing a weakened job market.
Mixed stock reactions, the Dow Jones industrial average briefly turned negative and then turned back to the positive zone. The Dow Jones Index rose 260 points, or 0.5%, to end with a score of 46,018. The S&P 500 index fell 0.1%, while the technology-heavy Nasdaq composite fell 0.3%.
Legislators on both sides of the aisle immediately politicized the reduced tax rate.
House Ways and Means Committee Chairman Jason Smith, Missouri Republican said he was happy Fed It is the “ultimate” reduction of interest rates.
“this Fed It seems to be awakening reality, but unfortunately their delays have hurt working families. Recent data show that 911,000 jobs were created in the back end of Biden’s presidency, fewer than initially understood, suggesting a weak presidential economy trump card Inherited from Joe Biden,” he said.
Rep. Brendan Boyle, a Pennsylvania Rep. Brendan Boyle, of the Pennsylvania Representatives Budget Committee, said the cuts to the tax rate proved Mr. Mr. Trump’s The economy is in poor condition and warns that “stagnation” is a combination of inflation and slow economic growth.
“The Fed is not because of the strong economy, because Donald Trump recklessly undermines tax rates because of the strong economy,” he said.
Wednesday’s tax cuts are unlikely to provide consumers with much relief, but Fed The Open Market Committee expects that the median will drop by two times by 2026 by the end of the year.
However, panelists disagree on the number of lower rates, with nine voters and no voters proposing two more quarters this year. Six members supported keeping the remaining time unchanged, with two requiring tax rates lower, one requiring interest rates to be raised and the other requiring 1.25 percentage points lower.
gentlemen. trump card Several unprecedented steps have been taken to force Fed Cut borrowing fees. He tried to fire Fed Governor Lisa Cook accused her of mortgage fraud. Ms. Cook awaits a federal appeals court ruling on Monday to determine whether she can participate in this week’s Fed Meeting; the court is in her favor.
Mr. Milan, sir trump card Nominated as an open seat on the board, aligned with the economic president and showed that he would urge higher cuts to lower interest rates. trump card Require.
Miran said at the confirmation hearing that he supported the central bank’s ability to make independent policy decisions that are not politically affected. But on Tuesday, sir trump card Already salivated for his newcomer Fed The draft will stand with Mr. Powell.
“He would have a big impact on ‘too late’ lower interest rates,” trump card said, repeating one of his favorite gentleman’s insults. Powell.
If sir trump card Successfully replaced Ms. Cook, his appointment will be a 5-2 majority on a seven-member board. Some Fed Observers say this could seriously undermine the ability of central banks to get rid of difficult decisions demanded by short-term political parties in the White House.
this Fed Be alert to lower interest rates this year, worrying about Mr. Trump’s Extensive tariffs will reignite inflation. Double-digit tariffs on household items such as coffee, clothing and small appliances rose by 2.9% compared to a year ago, the biggest increase in seven months.
But sir Trump’s Tariffs, which have been achieved in some form for most of the year, have not released the severe inflationary pressures some economists have predicted. The White House insists that foreign exporters, rather than U.S. companies or consumers, will bear tariff costs first.
The lowered tax rate will likely disappoint Mr. trump card Because it is not as much as he asks for. The President has launched a relentless campaign against Mr. Powell and Fed The board of directors has “a big cut.” July, sir trump card It means that the interest rate is “at least” three percentage points too high.
The President repeatedly insulted Mr. Powell As part of the stress movement, he was called “idiot”, “Numbskull” and “fool”. He also accused Fed Overspending in Washington’s headquarters renovation.
The president believes that a significant reduction in interest rates will reduce the interest on governments to pay government bonds and reduce the cost of mortgage and credit card spending. He said this could help stimulate the economy.
But, economists believe that fast and deep cuts may backfire because it looks like Fed Respond to the growing pressure on the White House. This will raise questions about its independence and credibility, further undermining the stability of the U.S. economy and shock investors on Wall Street.
