Breaking: Federal Reserve Makes Decision on Interest Rate Cuts, Trump Will Not Be Happy

AP Photo/Alex Brandon

President Donald Trump has been clear that he wants Jerome Powell, the Chairman of the Federal Reserve, to cut interest rates to stimulate the economy, and he’s even threatened to fire him. On Wednesday, however, the Fed announced that they are not making any cuts at this time.

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In a statement, the Board of Governors of the Federal Reserve System announced that they consider economic activity to be expanding at a solid pace and don’t see the need to raise rates that might lead to increased inflation:

Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent.

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Despite their apparently rosy outlook about economic expansion, they also opined that tariffs are causing tensions in the economic world:

“Uncertainty about the economic outlook has increased further,” officials said in their post-meeting statement, the first since President Trump imposed sudden tariff increases last month. “The committee … judges that the risks of higher unemployment and higher inflation have risen.”


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Some, including Steve Forbes, a one-time presidential candidate and editor-in-chief of Forbes magazine, disagreed with the Fed’s restraint:

Although the president has not yet weighed in on this announcement, expect him to be displeased based on his previous statements:

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As of this writing, the stock market reaction is muted, with the Dow Jones Industrial Average up approximately 270 points (.66 percent). We now wait to see how Trump responds.

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