The financial market almost unanimously expected that the US Federal Reserve would reduce interest rates again today by 25 basis points, to the range of 3.75-4.00%. If forecasts are confirmed, this will be the lowest level since November 2022.
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There is a Fed decision on interest rates. Unknown regarding the US labor market and inflation data
In September, the Fed returned to the monetary easing cycle, also cutting rates by 25 basis points. Previously, after a series of three cuts in the fall of 2024, the US central bank kept rates stable despite political pressure and Donald Trump's calls for a faster policy easing.
In recent speeches, Fed President Jerome Powell emphasized that the decisions of the monetary authorities will still depend on the situation on the labor market. However, the problem remains that the so-called government shutdown, which suspended the publication of some macroeconomic data, including employment statistics.
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The latest inflation data in the US may provide some guidance for policymakers. In September, the CPI increased by 3%. year on year, slightly below analysts' expectations (3.1%), and core inflation remained at 3%.. The slowdown in price growth may therefore confirm the Fed's belief that further easing of monetary policy does not pose a risk of a renewed increase in inflationary pressure.
Donald Trump demanded a reduction in interest rates
Donald Trump, despite the recent reduction in interest rates, is critical of the policy of the current Federal Reserve management, often accusing the central bank of “stifling economic growth” and “lack of loyalty to American workers.”
During the presidential campaign, he again called for aggressive cuts in interest rates, arguing that the lower cost of money would help maintain high growth rates and increase the competitiveness of American exports. These statements raise concerns about the future independence of the Fed, which has traditionally been one of the pillars of US economic policy.
