The Fort Worth Press - US Fed pauses rate cuts, resisting Trump pressure

USD -
AED 3.67298
AFN 73.066141
ALL 94.236801
AMD 398.178071
ANG 1.795813
AOA 914.5023
ARS 1056.243988
AUD 1.57117
AWG 1.8
AZN 1.701643
BAM 1.861718
BBD 2.011927
BDT 121.071644
BGN 1.865655
BHD 0.37689
BIF 2950.440481
BMD 1
BND 1.336912
BOB 6.885063
BRL 5.716699
BSD 0.996426
BTN 86.38646
BWP 13.744164
BYN 3.260943
BYR 19600
BZD 2.001552
CAD 1.418715
CDF 2865.999697
CHF 0.90113
CLF 0.024618
CLP 944.549977
CNY 7.254023
CNH 7.26266
COP 4125.5
CRC 505.256745
CUC 1
CUP 26.5
CVE 104.960806
CZK 23.886007
DJF 177.442922
DKK 7.11775
DOP 61.93869
DZD 134.768002
EGP 50.595598
ERN 15
ETB 127.62873
EUR 0.954175
FJD 2.29525
FKP 0.803654
GBP 0.793525
GEL 2.825025
GGP 0.803654
GHS 15.395013
GIP 0.803654
GMD 71.497564
GNF 8614.494244
GTQ 7.692271
GYD 208.47473
HKD 7.779785
HNL 25.402763
HRK 7.225076
HTG 130.379946
HUF 383.171014
IDR 16227
ILS 3.55557
IMP 0.803654
INR 86.87685
IQD 1305.334901
IRR 42087.498844
ISK 140.189887
JEP 0.803654
JMD 157.345403
JOD 0.709499
JPY 151.518496
KES 129.203075
KGS 87.450347
KHR 3989.395879
KMF 468.596354
KPW 900.090061
KRW 1443.170245
KWD 0.30847
KYD 0.830339
KZT 495.404722
LAK 21655.632606
LBP 89229.692877
LKR 294.488047
LRD 198.793948
LSL 18.309718
LTL 2.952741
LVL 0.60489
LYD 4.888938
MAD 9.948074
MDL 18.633363
MGA 4693.709515
MKD 58.673749
MMK 3247.960992
MNT 3461.151901
MOP 7.988691
MRU 39.667604
MUR 46.290295
MVR 15.397857
MWK 1727.658238
MXN 20.411698
MYR 4.433992
MZN 63.898703
NAD 18.309718
NGN 1509.809876
NIO 36.666334
NOK 11.11506
NPR 138.215515
NZD 1.743421
OMR 0.38502
PAB 0.996445
PEN 3.702114
PGK 4.007406
PHP 58.015504
PKR 278.141631
PLN 3.969285
PYG 7851.237703
QAR 3.632625
RON 4.74969
RSD 111.76295
RUB 91.749572
RWF 1398.02295
SAR 3.75059
SBD 8.432716
SCR 14.390535
SDG 600.999641
SEK 10.70273
SGD 1.341125
SHP 0.823587
SLE 22.749965
SLL 20969.505638
SOS 569.41331
SRD 35.222974
STD 20697.981008
SVC 8.718415
SYP 13003.016048
SZL 18.305737
THB 33.709026
TJS 10.876173
TMT 3.5
TND 3.154964
TOP 2.342104
TRY 36.22839
TTD 6.762269
TWD 32.729597
TZS 2599.999981
UAH 41.462941
UGX 3666.703156
UYU 43.282708
UZS 12946.736663
VES 61.992598
VND 25482.5
VUV 123.663246
WST 2.837369
XAF 624.390917
XAG 0.030849
XAU 0.000345
XCD 2.70255
XDR 0.76293
XOF 624.390917
XPF 113.52311
YER 248.000264
ZAR 18.43163
ZMK 9001.191301
ZMW 28.075219
ZWL 321.999592
  • NGG

    -0.5400

    60.73

    -0.89%

  • RBGPF

    63.5700

    63.57

    +100%

  • BTI

    -0.7900

    38.82

    -2.04%

  • GSK

    -0.3800

    36.17

    -1.05%

  • AZN

    -0.8700

    73.58

    -1.18%

  • RYCEF

    0.0200

    7.84

    +0.26%

  • CMSC

    0.0900

    23.5

    +0.38%

  • RIO

    0.0700

    63.36

    +0.11%

  • SCS

    -0.0700

    12.35

    -0.57%

  • BP

    0.5100

    35

    +1.46%

  • RELX

    -0.8400

    51.07

    -1.64%

  • VOD

    -0.0700

    8.36

    -0.84%

  • BCC

    1.0300

    121.63

    +0.85%

  • BCE

    0.1900

    23.82

    +0.8%

  • CMSD

    0.1872

    23.69

    +0.79%

  • JRI

    0.0435

    12.83

    +0.34%

US Fed pauses rate cuts, resisting Trump pressure
US Fed pauses rate cuts, resisting Trump pressure / Photo: © AFP

US Fed pauses rate cuts, resisting Trump pressure

The US Federal Reserve left its key lending rate unchanged Wednesday, resisting pressure from President Donald Trump to continue with cuts in the first rate decision since his return to office.

Text size:

Policymakers voted unanimously to keep the Fed's benchmark lending rate at between 4.25 percent and 4.50 percent, the Fed announced in a statement.

The decision marked a pause following three consecutive rate reductions which lowered the Fed's key lending rate by a full percentage point.

"The unemployment rate has "stabilized at a low level in recent months, and labor market conditions remain solid," the Fed said.

It added that inflation "remains somewhat elevated," while removing a reference in earlier statements to inflation making progress towards the bank's long-term target of two percent.

The US central bank has a dual mandate from Congress to act independently to tackle inflation and unemployment.

It does so primarily by raising or lowering its key short-term lending rate, which influences borrowing costs for consumers and businesses.

Most analysts agree that the US economy is going fairly well, with robust growth, a largely healthy labor market, and relatively low inflation which nevertheless remains stuck above the Fed's target.

Ahead of Wednesday's decision, the financial markets priced in a roughly 70 percent chance that the Fed would extend its pause at the next rate meeting in March, according to data from CME Group.

- 'Definitely inflationary' -

Since returning to office on January 20, Trump has revived his threats to impose sweeping tariffs on US trading partners as soon as this weekend and to deport millions of undocumented workers.

He has also said he wants to extend expiring tax cuts and slash red tape on energy production.

Last week, Trump also revived his criticism of the independent Fed and its chair Jerome Powell, whom he first appointed to run the US central bank.

"I'll demand that interest rates drop immediately," he said, later adding that he would "put in a strong statement" if the Fed did not take his views on board.

Most -- though not all -- economists expect Trump's tariff and immigration policies to be at least mildly inflationary, raising the cost of goods faced by consumers.

"I think those policies are definitively inflationary, it's just a question of what degree," said Zandi from Moody's Analytics.

"A big part of (the Fed's) job in calibrating monetary policy is responding to what lawmakers are doing, and if they can't get a fix on what they're doing, then that just argues for no change in policy, either higher or lower rates," he added.

- 'Meaningful odds' -

At the Fed's previous meeting, policymakers dialed back the number of rate cuts they expect this year to a median of just two, with some incorporating assumptions about Trump's likely economic policies into their forecasts, according to minutes of the meeting.

Given the uncertainty about the effect of Trump's policies on the US economy, analysts are now divided over how many rate cuts they expect the Fed to make this year.

In a recent investor note, economists at Goldman Sachs said their baseline forecast was for two quarter-point cuts, assuming a mild, one-time effect on inflation, "causing it to fall by less but not to rise and leaving the door open to rate cuts."

"We retain our baseline that the FOMC will cut rates 25bp (basis points) this year, in June," economists at Barclays wrote, pointing to the underlying strength of the economy.

Zandi from Moody's Analytics said he also expects two rate cuts later in the year.

But, he added, "there are meaningful odds that the next move by the Fed may not be a rate cut, it might be a rate increase."

W.Lane--TFWP