The US Fed Rate Rate Recakes on Trump’s tariff again calls the ‘big deal of uncertainty’
US Federal Reserve President Jerome Powell on Wednesday warned that the growing and uncertain tariff policies of US President Donald Trump may force the central bank to a difficult position where its major objectives, low inflation and maximum employment may come into struggle. Pavel said in a press conference, “I think for example, where tariff policies are going to settle, is a great deal of uncertainty and when they go out, what will be implications for the economy,” Powell said at a press conference. He said, “We can find ourselves in a challenging scenario in which our double mandate targets are under stress,” he said, the responsibility of the fed mentions the responsibility of the Fed to balance the price stability and the development of the job. The Federal Reserve abandoned unchanged interest rates for the third consecutive meeting, keeping them at a distance of 4.25% to 4.5%. This decision was unanimous, showing increasing concern over the economic impact of Trump’s business moves, especially the risk of inflation pressure from the new tariff and the risk of recession in hiring. Stocks of Wall Street shut down after Fed’s decision. Since March, the Trump administration has implemented extensive trade measures, including 10% universal tariffs and a punitive 145% minimum tariff on most Chinese goods. In April, additional levies were introduced on dozens of other trading partners, only to allow time to stop by July. The White House called the move for American trade “liberation day”, promotes weeks of turbulance in financial markets. Trump has said that these tariffs will be “for now” despite the US-China trade talks plan in Switzerland. “We were losing a trillion dollar in a year, now we are not losing anything,” Trump claimed during the oath of Ambassador David Paradu. Asked if he would reduce the tariff to encourage talks, Trump clearly responded, “No.” The instability of the policy, announcing and then the tariff back, shocking the markets. According to The New York Times, Trump’s decisions have increased the uncertainty in Fed’s economic outlook. Former Fed Economist Rodney Ramcharan said, “All hard data are backward.” “And all soft data … feels very bad.” “We are well deployed to wait for more clarity before considering any adjustment in our policy stance,” Powell said. However, he admitted that the fed is struggling to gauge how tariffs can shape the economy. He said, “It is not really clear what we should do,” he said, speculating that the Fed may cut rates in its next meeting in June. Trump has often not reduced the fed to reduce monetary policy in Powell and Fed, despite increasing the risks of inflation. Pavel, however, the work of the fed is unaffected by political pressure: “We always balance economic data, approach, risks, and this.” CNN reported that Powell suggested that the result of the upcoming trade negotiations can move the economic scenario to a great extent or not, depending on how the interaction develops.
