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Federal Reserve likely to defy Trump, keep rates unchanged this week (apnews.com)

submitted 4 weeks ago by MicroWave@lemmy.world to c/economics@lemmy.world

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The Federal Reserve will likely keep its key short-term interest rate unchanged on Wednesday, despite weeks of harsh criticism and demands from President Donald Trump that the Fed reduce borrowing costs.

After causing a sharp drop in financial markets two weeks ago by saying he could fire Fed Chair Jerome Powell, Trump subsequently backed off and said he had no intention of doing so. Still, he and Treasury Secretary Scott Bessent have said the Fed should cut rates.

They argue that inflation has steadily cooled and high borrowing costs are no longer needed to restrain price increases. The Fed sharply ramped up its short-term rate in 2022 and 2023 as pandemic-era inflation spiked.

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[–] SnotFlickerman@lemmy.blahaj.zone 48 points 4 weeks ago* (last edited 4 weeks ago) (1 children)

Trump is not supposed to have control over the Federal Reserve anyway.

Articles worded like this are giving Trump power he does not actually have. The Fed isn't defying anyone, they are independent.

Our media fucking sucks shit.

[–] peoplebeproblems@midwest.social 6 points 4 weeks ago

He doesn't have it yet.

History rhymes, and I do believe it will here too.

[–] wise_pancake@lemmy.ca 14 points 4 weeks ago (2 children)

Does Trump want inflation or something?

Slash rates, increase COGS, decrease supply!

Any of those policies alone mean inflation. All of them together is disaster.

There’s a reason central banks don’t cut rates when times are good. Though one would argue times are not good at the moment…

[–] Wazowski@lemmy.world 15 points 4 weeks ago (1 children)

Trump is actively working in the interest of our geopolitical foes. He was installed to harm the United States.

[–] SnotFlickerman@lemmy.blahaj.zone 5 points 4 weeks ago (1 children)

I mean, yes, but he was also installed by our class foes. A lot of the wealthy in the US support what he is doing because they want to rule over the scraps that are left and they can jetset around the world in ways we cannot. They became "international wealthy" two decades ago and they no longer have allegiance to any specific country.

So it's our internal "foes" as well, the obscenely wealthy.

[–] Wazowski@lemmy.world 2 points 4 weeks ago

No argument. Our enemies are internal and external.

[–] alanjaow@lemmy.world 1 points 4 weeks ago

He can blame them in the short term, until he finds the next thing to blame for his actions.

[–] aramis87@fedia.io 8 points 4 weeks ago

Considering how often they bowed to him last time, and then over-delayed under Biden, it's about time!

[–] DarkFuture@lemmy.world 6 points 4 weeks ago

America has mostly, but not fully, capitulated to a felon rapist traitor.

Not yet.

[–] JeremyHuntQW12@lemmy.world 1 points 4 weeks ago (1 children)

Trump will just put out an executive order demanding the issue of Bonds, thus driving the effective rate down.

[–] surewhynotlem@lemmy.world 3 points 4 weeks ago

Nah, that is too complex for his base to understand. If rates aren't changed, he'll just blame the bad economy on the Fed. It's just a deflection.

[–] Randomgal@lemmy.ca 1 points 4 weeks ago

He could. Inflation is bad for everyone, except for the rich who have most of their money in assets and can swiftly move between currencies.