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The radical prices deployed by the Trump administration this week should increase slow inflation and economic growth, according to the president of the federal reserve, Jerome Powell, who said on Friday that the Fed is likely to maintain its unchanged reference interest rate.
Washington, DC – May 01: the president of the Federal Bank of the reserve Jerome Powell announces that interest rates … More
Key facts
Powell has described the economic impact of prices as “much larger than expected” and said that import taxes should lead to inflation, at least temporarily, during remarks in Arlington, Virginia.
After the announcement of President Donald Trump’s price, investors hoped up to five rate decreases this year to stimulate economic growth, but Powell said the central bank would leave interest rates to around 4.3% in the near future.
Powell’s remarks occurred after Trump called him to “stop doing politics” and reducing the target rate of federal funds in a Friday publication on social networks; Trump has repeatedly demanded the Fed to reduce rates, despite the political independence of the central bank.
Trump prices will probably increase prices between imported goods, including cars, coffee and chocolate, while many retail brands depending on the factories of Southern Asian countries should also be affected, countries like China, Vietnam and Taiwan are all slapped with prices greater than 30%.
The annual rate of central inflation was 2.8% in February, still well above the target target of the Fed.
Crucial quote
“Inflation will increase and growth will slow down,” said Powell. “But it is not clear at the moment what will be the appropriate path for monetary policy, and we will have to wait and see how it takes place before starting to make these adjustments.”
Key
On Wednesday, the Trump administration noted prices in more than 180 countries, global trade tensions have increased and the three main clues of the American market are down at least 10% compared to their record summits several months ago, fueling fears of recession. Most countries have been struck by a 10% rate on imported goods, but for those who judged the “worst offenders”, the rate is even higher. China, for example, has been slapped with a rate of 34% on its exports to the United States (in addition to existing prices, bringing the real rate to 54%). The country responded on Friday with a 34% reprisal rate on all goods imported from the United States
This is a story in development and will be updated.
More advanced reading
Trump shares claim that it crushes the “express” stock market while it pressure for emergency rate decreases (Forbes)
Here is what will cost more after Trump’s prices: coffee, cars – and maybe an iphone of $ 2,300 (Forbes)
Actions plunge even further on prices – Nasdaq enters the bear market, the loss of 2 days of DOW extends to more than 3,000 points (Forbes)
