Asked during the panel if the Fed would again lower interest rates if Trump did not announce his controversial plan to impose duties on many foreign trading partners at the beginning of this year, Powell said: “I think so“.
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Trump's duties and the Fed approach. Powell comments
“As a result, we abstained with a reduction in interest rates when we saw the size of the duties and basically all inflation forecasts for the United States increased significantly as a result of the duties” – added Powell during the event that took place during the European Central Bank forum in Sintra in Portugal.
Powell's award appears when the Fed entered the interest rates scheme despite the growing pressure from the White House.
Last month, the Fed again maintained a key interest rate at a constant level. Thanks to this, from December, the cost of the loan is in the target range from 4.25 percent. up to 4.5 percent
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The Federal Committee of the Central Bank Open Market Square indicated through the so -called dot chart that two discounts may occur by the end of 2025. However, Powell said during a press conference last month that the Fed was “well prepared” to stay in waiting mode.
Fed monetary policy. What next?
Powell said on Tuesday, asked if July would be too early for a reduction in interest rates, that “he couldn't say” and that “it will depend on the data.” Investors of time -term contracts at FED funds value over 76 percent. The probability that the central bank will keep the interest rates again at a constant level during the July Political MeetingO, according to the CME Fedwatch tool.
“We meet after the meeting,” said Powell during Tuesday's panel. “I wouldn't take any meeting out of the table or put it directly on the table. Everything will depend on how the data develops.”
Powell's future in the Fed
The Fed's adamant position aroused the anger of Trump and his administration, who publicly admonished Powell for the lack of recent movements of the central bank on interest rates. Last week, Trump called Powell a “terrible” and said he was “a very mentally average person.”
Asked on Tuesday, Will he stay as president of the FED after the end of his term of office next year, Powell replied: “I have nothing to say on this topic todayT “. The term of office of Powell as a governor is to last until 2028, although his role of the chairman ends in 2026.
The global trading policy and Trump attacks on Powell took a central place during the Tuesday event, in which the head of the American FED was accompanied by other leaders of central banks from around the world. Other leaders of international central banks answered questions about whether they would act the same as Powell in his position and whether foreign countries break away from the USA.
Trump's tariff policy, which is not there once, has set global markets and monetary policy decision makers on the edge. For the first time, the US President presented a plan to introduce wide and high duties to several foreign countries at the beginning of April, and then delayed many of the most intense tariffs shortly after American markets fell.
The American stock market has more than made up for the losses recorded after the first announcement of Trump, and the S&P 500 index returned to record levels in recent days. However, market participants and monetary policy leaders continue to report uncertainty about the future of global trade, as well as its impact on stock markets and the global economy.
“Everything I want – and everything that everyone wants in the Fed – is to ensure the economy of price stability, maximum employment and financial stability,” said Powell. “What does not let me sleep at night is: how to achieve it? I want to hand over my successor the economy in good condition.”
