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There will be no more cuts after the initial meeting following Trump’s return


Federal Reserve officials decided to keep interest rates steady after their latest meeting, despite pressure from President Trump to lower rates. The central bank noted that inflation remains somewhat elevated, with consumer prices averaging 2.9% higher than the Fed’s 2% target. The three major stock indices dipped following the decision, with Fed Chairman Jerome Powell set to discuss the central bank’s current views on interest rates.

Trump has been vocal about his desire for interest rates to drop, criticizing Powell whom he appointed in 2017. The economy is still grappling with the Covid-19 pandemic, but indicators such as unemployment and consumer spending have shown improvement. The Fed has lowered rates three times in recent meetings and is expected to make two more cuts this year.

Economists warn that the delicate balance between taming inflation and avoiding a recession has become more complicated due to Trump’s economic agenda, particularly his policies on tariffs and immigration. Analysts believe that the Fed’s decisions this year will be influenced by the new administration’s policies, which could impact inflation and inflation expectations, potentially putting the central bank’s 2% target at risk. Overall, the economy is still performing well, with GDP growth and other metrics indicating that a fresh boost from the Fed may not be necessary at this time.

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