The global assault on Donald Trump prices is expected to increase prices and slow down economic growth, warned the president of the Federal Reserve Jerome Powell, defying the US president’s requests for a drop in immediate interest rates.
While the American economy remains robust, Powell warned that there is a strong uncertainty about its management. “Low-down risks have increased,” he said in Arlington, Virginia on Friday.
The president of the Fed stressed that the prices unveiled by Trump this week were much more extensive than expected – and warned that the impact would probably be greater accordingly.
Trump promised to lower prices while campaigning to win back the White House last year, and wrongly said that they were “down”, despite inflation.
But prices should increase due to its price plan, according to Powell, echoing the predictions of many economists.
“Although uncertainty remains high, it now becomes clear that pricing increases will be considerably greater than expected,” said Powell. “The same goes for economic effects, which will include higher inflation and slower growth.
“The size and duration of these effects remain uncertain. Although prices are very likely to generate at least a temporary increase in inflation, it is also possible that the effects can be more persistent. ”
A few minutes before Powell was to speak on Friday, Trump used a social media position to repeat his Call for Fed to reduce prices. “It would be an ideal moment for the president of the Fed, Jerome Powell, to reduce interest rates,” wrote the American president. “Cut interest rates, Jérôme and stop making politics!”
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Trump’s extraordinary public interventions on rates have raised fears that the independence of the Fed is now threat. Powell has maintained that the central bank will only reduce rates when decision -makers decide that it is the right time to do so.
