The US Federal Reserve will conclude its interest rate review today. It is expected to keep rates at 2%, despite
The US Federal Reserve will conclude its interest rate review today. It is expected to keep rates at 2%, despite a steady rise in inflation, an unemployment rate at its lowest level since the 1960s and an economy posting a bumper of 4.1% of growth in the last three months.
Instead, analysts expect the Fed to hike interest rates in September and then once more in December, maintaining a monetary policy setting that has seen rates hiked five times since Donald Trump assumed the presidency in January 2017.
Further hikes could strain the Fed’s relationship with the White House after Mr Trump suggested that rising rates are slowing the US economy and harming exports. It is highly unusual for a president to publicly criticise the Fed, as the central bank’s independence is considered sacrosanct for economic stability.
With Fed Chair Jerome Powell—appointed by Trump—critical of the unpredictability of current US trade policy, watch for tensions between the Fed and White House to rise. Indeed, a mention of trade concerns today is likely, while persistence in raising interest rates could quickly see Trump and Powell at loggerheads.
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