The Federal Reserve continues to take a wait-and-see approach. The minutes from the last meeting of the Federal Open Market Committee (FOMC), responsible for setting monetary policy, emphasize the idea that interest rates are at the right place to await greater clarity on the economic policy measures of the Donald Trump government and their effects on the economy. With this attitude, it is most likely that interest rates will remain unchanged at the next meeting, scheduled for June, and perhaps beyond, despite Trump's own insistence on lowering the cost of money. Furthermore, Fed officials note that economic prospects have deteriorated and that a recession is as likely as their baseline scenario.
At that meeting, the central bank decided to keep the benchmark rate unchanged for the third consecutive time, in the range of 4.25% – 4.50%. Although this cut was widely expected at that time by the markets, the central bank's president, Jerome Powell, warned that Donald Trump's tariff policies "are still evolving and their effects on the economy remain very uncertain,” which has led monetary authorities to conduct themselves with greater caution than the markets anticipated.
At that moment, Powell stated that if the large announced tariff increases are maintained, “it is likely to generate an increase in inflation, a slowdown in economic growth, and an increase in unemployment.”
Still, he clarified: the “shock” of tariffs is a concern that has affected the confidence of consumers and businesses, but has not yet materialized in economic data. And while he said that uncertainty is “extremely high,” he insisted that “there is no rush” to make adjustments to the monetary policy rate.
$XRP
At that meeting, the central bank decided to keep the benchmark rate unchanged for the third consecutive time, in the range of 4.25% – 4.50%. Although this cut was widely expected at that time by the markets, the central bank's president, Jerome Powell, warned that Donald Trump's tariff policies "are still evolving and their effects on the economy remain very uncertain,” which has led monetary authorities to conduct themselves with greater caution than the markets anticipated.
At that moment, Powell stated that if the large announced tariff increases are maintained, “it is likely to generate an increase in inflation, a slowdown in economic growth, and an increase in unemployment.”
Still, he clarified: the “shock” of tariffs is a concern that has affected the confidence of consumers and businesses, but has not yet materialized in economic data. And while he said that uncertainty is “extremely high,” he insisted that “there is no rush” to make adjustments to the monetary policy rate.
$XRP