US FOMC to announce interest rate decision soon: Will Fed cut rates due to Trump pressure?
1 month, 3 weeks ago

US FOMC to announce interest rate decision soon: Will Fed cut rates due to Trump pressure?

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Last week, Trump revived his criticism of the Fed and its chair Jerome Powell, whom he first appointed to run the US central bank. ‘I’ll demand that interest rates drop immediately,’ he said After three interest rate cuts in a row, the US Federal Reserve is expected to take a breather on Wednesday and signal it will remain on pause until the data changes, despite pressure to cut from President Donald Trump. “I’ll demand that interest rates drop immediately,” he said, later adding that he would “put in a strong statement” if the Fed did not take his views on board. ‘Meaningful odds’ At the Fed’s previous meeting, policymakers also dialed back the number of rate cuts they expect this year to a median of just two, with some incorporating assumptions about Trump’s likely economic policies into their forecasts, according to minutes of the meeting. In a recent investor note, economists at Goldman Sachs said their baseline forecast was for two quarter point cuts, assuming a mild, one-time effect on inflation, “causing it to fall by less but not to rise and leaving the door open to rate cuts.” “We retain our baseline that the FOMC will cut rates 25bp this year, in June,” economists at Barclays wrote, pointing to the underlying strength of the economy.

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