2024-11-07 23:55:09
Economy
Finance
Inflation

Fed's Rate Cuts Amid Trump's Influence and Inflation Concerns

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The US Federal Reserve recently reduced its key interest rate by 0.25 percentage points, bringing it to a range of 4.50% to 4.75%. This decision reflects the Fed's ongoing efforts to respond to a declining inflation rate, which has moved closer to its 2% target. However, the economic climate remains complex, influenced by the recent election victory of Donald Trump.

Trump's previous policies, including tariffs and tax cuts, have the potential to reignite inflation, posing a challenge to the Fed's strategy. The central bank must navigate these challenges while maintaining its independence, which Trump has previously criticized. Fed Chair Jerome Powell, whose term ends in 2026, remains steadfast in his commitment to the central bank's policies, despite Trump's criticisms.

The rate cut marks the second consecutive reduction following the pandemic, indicating the Fed's cautious approach to ensure economic stability. As inflation cools, the Fed aims to balance its policy to support the job market and manage inflation risks. The decision was made unanimously by the Federal Open Market Committee, emphasizing a collective acknowledgment of the current economic conditions.

Internationally, similar trends are observed as central banks, such as the European Central Bank and the Bank of England, also adjust their rates in response to inflation dynamics. However, the global economic outlook remains uncertain, amplified by potential trade tensions and geopolitical risks associated with Trump's policies. The Fed's actions indicate a proactive stance in mitigating these uncertainties while promoting economic growth and stability.

sueddeutsche
7. November 2024 um 19:06

Monetary Policy: US Federal Reserve Cuts Key Interest Rate Again

Economy
Finance
Politics
The trade tariffs threatened by Trump could reignite inflation, so the Fed would have to raise interest rates again. This could undo the Fed's interest rate hike cycle before it has really begun.
rp_online
7. November 2024 um 19:06

Monetary Policy: US Federal Reserve Lowers Key Interest Rate by 0.25 Percentage Points

Finance
Economy
Politics
The Fed lowers the key interest rate to 4.5-4.75%, but Trump's return could influence interest rate policy. Trump's tariffs and tax cuts could cause inflation to rise again, which might lead the Fed to maintain a high interest rate policy. Powell's term ends in 2026, and then Trump can nominate a new Fed Chair. High interest rates dampen demand, as individuals and businesses have to spend more on loans, which reduces growth. Companies cannot pass on higher prices indefinitely, ideally leading..
zdf
7. November 2024 um 20:47

Fed cuts key interest rate for the second time in a row

Economy
Politics
Finance
The US Federal Reserve (Fed) has cut the key interest rate for the second time in a row, as the inflation rate in the US continues to decline. However, Republican Donald Trump, who can nominate a new Fed chairman in 2026, criticizes the central bank's interest rate policy.
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