By AP Economics Writer Christopher Al Gerber
WASHINGTON (AP) – Federal Reserve Chairman Jerome Powell said Wednesday that President Donald Trump’s demand for low interest rates would not lead central banks to change their rate decisions.
“People can be sure we keep our heads down, do our jobs and make decisions based on what is happening in the economy,” Powell said from a member of the House Financial Services Committee. I mentioned it under the question of: Powell spoke to Congress on the second day of his six-month testimony.
Earlier on Wednesday, Trump said on social media that “interest rates should be reduced and that he will hold hands with future tariffs.”
However, Powell showed at a press conference last month that he would curb further cuts as he awaited evidence that inflation was approaching its 2% target after the Fed cut its key rate three times late last year. Ta.
And many Fed officials want to wait and see how Trump’s policies will affect the economy, including the tariffs he proposed and the tariffs he introduced. Most economists are worried that tariffs will at least temporarily boost inflation.
On Wednesday, the government reported last month that inflation rose, with consumer prices rising in January, rising 3% from the previous year, up from the 2.4% three and a half year low in September. The rise makes the Fed even less likely to immediately reduce key rates. The Fed rate affects the overall economy’s borrowing costs, including mortgages, car loans, and credit cards.
The Fed cut its key rate three times last year, down from 5.3% to about 4.3%, but said in January it would not change that rate until further declines inflation. In December, Fed officials predicted that they would implement two cuts this year, but some economists believe the Fed may be on hold all year round.
Original issue: February 12, 2025 11:30am EST
