Trump bites granite at Powell

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Donald Trump has drawn all the registers to finally get deeper guiding interest rates from the American Central Bank: The US President Jerome Powell has insulted him several times. Furthermore, threatened him with the throwing out and recently attacked him with false figures in front of a surprise visit to a construction project.

But the central bank and its boss are not impressed by the dirt campaign of the White House. Therefore, On Wednesday, she left the key interest rate once again to 4.25 to 4.5 percent. Meanwhile, In this volume, she has been holding the world’s most important interest rate since last December.

Powell, even Trump’s personal attacks, cannot be lured out of the reserve. However, “It was a good visit,” he said to Trump’s most recent flying visit.

More dissent than usual

In addition to the Bank of England. the FED leads the most tight monetary policy among all larger western central banks. Trump had asked the Fed several times to reduce the key interest rate by up to three percentage points. so that his government had to pay less debt interest.

Such a drastic reduction in credit costs was never up for debate for the Fed tip. Nevertheless. the current interest rate decision shows that the leading monetary politicians of the country are visibly disagreed with the American economy; trump bites granite powell And how to react to it.

The FED governors Christopher Waller and Michelle Bowman, as they had previously announced, voted for an interest rate reduction by 0.25 percentage points. The Fed has not occurred for decades that two governors deviate from the majority position. At least Waller’s position is interpreted by many analysts as the application letter from Trump. Waller is considered one of four favorites who could succeed Jerome Powell in May 2026.

Powell himself was not worried on Wednesday because of the different opinions. It is not surprising that there are different views because the uncertainty in the economy is increased. there are risks in achieving both goals of the Fed. “It’s an unusual situation,” said Powell.

The financial markets already expected that the trump bites granite powell key interest rate is not changed despite the dissent of Bowman and Waller. However. more clarity was hoped for whether the FED could decide to reduce the next interest in September or would like to wait further.

In fact. in its press release, the FED gave a first indication that it shares the worries of Waller and Bowman to a certain extent. The latest data would point out that economic growth had slowed down in the first half of the year. writes the central bank. At the last situation assessment in June, the Fed still wrote that the economy continues to grow at solid pace. In addition, the statement in the current communiqué was avoided that the uncertainty in terms of economic prospects had decreased.

The financial markets hardly reacted to the Fed’s interest trump bites granite powell rate decision. Some statements by Jerome Powell During the press conference. they let them come to the conclusion that the Fed will not loosen monetary policy too quickly in the next sessions. Therefore. the American stock indices lost some value, while the return on ten -year -old American government bonds increased and the dollars easily strengthened.

Trump bites granite powell

Robust labor market

The Fed focuses on two goals: price stability and full employment. While inflation in the United States is still above the target value of 2 percent. has finally risen again, the labor market can deal with the high key interest rates surprisingly well.

On Wednesday morning, the Bureau of Economic Analysis reported that the American economy grew by 3.0 percent in the second quarter trump bites granite powell compared to the previous year. which prompted the White House to announce: “President Trump fueled the golden age”. However. the data is distorted because of the hamster purchases that many American importers and consumers had made in spring to advance Trump’s tariffs.

However, other series of numbers also indicate that the US economy lasts better than was to be feared in spring. Consumers have again gained confidence and the unemployment rate remains at depths 4.1 percent. Many of the companies that are currently reporting their half -year results have also positively surprised the analysts when winning.

However. Waller and Bowman, who voted for interest in interest, fear that the job market behind the scenes has already weakened significantly; The private sector only creates a few jobs. The fact that the unemployment rate has not trump bites granite powell risen is also due to the unwillingness of companies to relieve employees. What Wallers believes could change quickly.

At the same time. immigration to the United States has decreased, which is why fewer candidates vie around the available jobs. Powell addressed exactly that in the press conference: In parallel to the number of vacancies. the job offered, and therefore the unemployment rate for the FED was the most important data point to assess the condition of the labor market.

Customs do uncertainty

The task of the central bank is also complicated by Trump’s new import duties. Until recently it was completely unclear what level this would be at the long term. Now that Trump has concluded with most important trading partners. at least sent declarations of trump bites granite powell intent, the Fed receives some planning security: 15 to 25 percent for most countries and goods, with some exceptions and a few down.

However. Jerome Powell now emphasized before the media that, from the Fed’s point of view, there is still great uncertainty at which level the effective customs sets will stabilize. Shortly before the start of Powell’s press conference. the Trump government provided an example that Powell’s argument confirmed: It specified that certain imports of copper, unlike from the markets, would not be subject to 50 percent. The copper price on the New York stock exchange subsequently crashed by up to 18 percent.

In any case. Additionally, the customs sets are enormously high and it must be assumed that sooner or later inflation in the United States will be awakened.

However, the Fed governors do not agree whether it will be a one-time or persistent effect. Depending on the price, you have to react very differently to the price boost. However the American economy is developing: the Fed leadership will still have a lot of work in the coming months.