As it watches to see how President Donald Trump’s stop-start tariff rollout impacts the health of the largest economy in the world, the US Federal Reserve is anticipated to prolong a current halt in rate reduction this week.
Trump has placed hefty tariffs on China, as well as lesser “baseline” tariffs of 10% on goods from most other nations and 25% charges on certain goods, including steel, cars, and aluminium. To allow countries time to renegotiate current agreements with the United States, the president has also halted increased duties on dozens of other trading partners until July.
The majority of analysts anticipate that the tariffs, which have been in place since January, will raise prices and slow economic growth, at least initially. This might prolong the Fed’s hold.
After serving as president of the Cleveland Fed for 10 years, Loretta Mester resigned, saying, “The Fed has to be very focused on maintaining inflation so that it doesn’t start moving back up in a more persistent way.
That would negate all the efforts made to reduce inflation over the past three years,” she told AFP. Since December, the Fed has maintained its benchmark interest rate between 4.25 and 4.50 percent to continue bringing inflation down to the bank’s long-term aim of 2%.
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