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Federal Reserve Stays Steadfast Amid Political Pressure
2025-05-06 04:40:12
Economy
Finance
Government

Federal Reserve Stays Steadfast Amid Political Pressure

Image courtesy of : AFP (KAYLA BARTKOWSKI)

The U.S. Federal Reserve is poised to maintain interest rates steady, resisting pressures from President Trump for cuts. Employment figures and inflation data support this decision, despite a contraction in GDP during the first quarter.

Additionally, uncertainty looms due to expected rate adjustments by the European Central Bank and ongoing trade tensions. Analysts largely agree that the Fed will not alter rates in the upcoming meeting, focusing instead on the broader economic landscape.

Fed Chair Jerome Powell faces intensified scrutiny from Trump, who remains vocal about his dissatisfaction. Nonetheless, the Fed emphasizes its independence, prioritizing evidence over political influence.

Key economic indicators, including stable employment and inflation control, further reinforce the Fed's cautious approach. As the meeting approaches, market participants await definitive signals regarding future monetary policy, amidst a backdrop of fluctuating global economic conditions.

Related news on that topic:

Powell Stands Firm Amid Trump Pressure

US Federal Reserve Chairman Jerome Powell remains steadfast against President Trump's calls for interest rate cuts. Despite Trump's criticism and attempts to sway policy, the Fed is likely to maintain current rates, responding to positive job reports and manageable inflation. This independence highlights the central bank's commitment to economic stability, even amidst external pressures from the White House and fluctuating market sentiments. Powell's approach underscores the importance of consistent monetary policy, as trade negotiations continue to create uncertainty. Trump's recent comments indicate a slight retreat from his earlier stance, allowing Powell to fulfill his term while navigating complex economic factors.

US Job Growth Challenges Fed Rate Cut Expectations

Recent labor market data showcases a robust performance, with the U.S. economy adding 177,000 jobs in April, surpassing forecasts. This steady job creation has contributed to an unchanged unemployment rate of 4.2%. Despite this positive news, President Trump is advocating for the Federal Reserve to lower interest rates, asserting that strong employment and low inflation warrant such measures. However, the Fed remains cautious, balancing the dual mandates of fostering employment while managing inflation risks, especially amid uncertainties surrounding tariffs. Market analysts predict that while immediate rate cuts are unlikely, future decisions could hinge on labor market indicators. The ongoing economic landscape reveals mixed signals, with concerns about the impact of trade tensions on growth and consumer confidence. As the Fed prepares for its upcoming meetings, the focus remains on how it will navigate these complexities in a challenging economic environment.

Read 27 more recent news on this topic

The press radar on this topic:

The Street
6. Mai 2025 um 16:54

It's Fed week with interest rates in focus. Here's what to expect. TheStreet Daily Newsletter

The Federal Reserve's Federal Open Market Committee will meet this week to discuss interest rates. No changes to the Federal Funds Rate are expected, which will remain in the range of 4.25% to 4.5%. Treasury Secretary Scott Bessent has argued the Fed should cut rates, as the 2-year Treasury yield is below the Fed Funds Rate. However, the Fed is unlikely to make any rate cuts, with employment stable and inflation contained. The Fed meeting is the biggest U.S. economic event this week, with other..
Yahoo News
5. Mai 2025 um 16:44

Powell won’t cut interest rates on Wednesday, Wharton’s Jeremy Siegel says. He suspects attacks on the Fed chair will escalate

Federal Reserve Chair Jerome Powell is not expected to cut interest rates during the upcoming meeting, despite President Trump's ongoing calls for lower rates. Analysts, including Wharton’s Jeremy Siegel, suggest there is a nearly 98% consensus that rates will remain unchanged due to concerns over inflation from tariffs. Siegel predicts that Trump’s criticism of Powell will intensify, reflecting the president's dissatisfaction with the Fed's stance. The ongoing trade tensions and tariffs between..
rbb24
5. Mai 2025 um 18:45

Will the Federal Reserve ignore Trump and keep interest rates stable this week?

The Federal Reserve is likely to keep the main interest rate unchanged this week, despite President Trump's ongoing criticism of the central bank and his repeated calls for lower interest rates. The Federal Reserve is facing political pressure, but it is reaffirming its independence and says it will wait to make any decision on interest rates until it sees sufficient evidence, especially regarding the impact of tariffs on inflation.
EL PAÍS
6. Mai 2025 um 03:30

The Fed Prepares to Ignore Trump's Pressure with a New Pause in Rate Cuts

The U.S. Federal Reserve is preparing to keep interest rates unchanged despite pressure from Trump, as employment data and inflation support this decision. However, the contraction of GDP in the first quarter and the expectation of a rate cut by the European Central Bank generate uncertainty about the future of monetary policy.
CW

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