(Bloomberg) – Federal Reserve Responsible for the second direct meeting, which was caught between mounting fears that the economy remained slowly, and inflation could remain stubbornly high.
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President Jerome Powell recognized the high level of uncertainty of the significant policy of President Donald Trump, but he repeated the Central Bank, it is in no hurry to adjust the loan costs. He said that officials could expect greater clarity to the economy on the influence of that policy before acting.
On Wednesday, the Federal Open Market Commission voted in the Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federation. Governor Christopher Wallver, who supported the reserve pace stable, was dissolved from the decision on the balance sheet.
The agenda of the steady and frequent frustrated policy of the top has placed the agenda of Trump’s ambitious and often unknown policy agenda. Trump’s constantly changing plans for US trade partners have caused fears to slow down economic slowdown and inflation.
“Inflation has started to rise,” said Powell. “We think partly in response to tariffs. And this year can be delayed further progress. “
Powell said that his basic work is that any tariff collision will be “transition”, but in the future it will be very difficult to say how inflation comes from tariffs.
The S & P 500 moved higher because Powell spoke, and the treasury proficiency moved lower.
Updated forecasts
The new economic forecasts showed that this year Fed officials celebrate their forecasts for growth and inflation. It also showed that this year according to Median EARMENT, according to Median EARMENT, a pencil with a pencil with a pencil with a pencil with a pencil with a pencil with a pencil pencil.
This is stated that eight officials saw one reduction or less, emphasizing the determination of policy makers, at least so far, to suppress inflation.
Powell said that the prospect of monetary policy has not changed, as the predictions of low growth and higher inflation balance each other.
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“Uncertainty over economic worldview has increased,” the commission said in a post-election statement. Officials also removed the preliminary language, noting that the risks to achieve their work and inflation have been equally equipped.
The officials raised the average score for the so-called basic inflation, which from 2.5% of this year stems from volatile food and energy prices. Their 2025 economic growth prospects froze by 1.7% to 2.1%.
They raised their assessment by 4.4% to unemployment by the end of this year, and saw 4.3% of December.
Changing the picture
Fed officials hold interest rates for the closure of 2024 this year. Since December, they have expressed a desire to make more progress on inflation and more clarity before they find another step.
At that time, inflation remained raised, while consumer expectations for further prices rose due to the trade war. Expenditures are softened, and consumer confidence has deteriorated sharply.
Powell said that the probability of the fall rises, but they are not high. He pointed out so-called soft data special as mood as a stunning concern, but emphasized Fed emphasis on heavy data. He turned back to the University of Michigan, showing a sharp increase in long-term inflation expectations, calling it “more distant”.
“We understand that emotions have fallen sharply, but economic activity is not yet considered,” Powell said. “I would say that the economy seems to be healthy.”
The investors have negatively responded to the trade war and concerns about the prospects of growth, falling with the S & P 500 by more than 10%, before the same losses.
The Trump administration has allowed little to reduce the fears of the fall, and the president said that the US economy collides on March 9. Secretary of the Treasury Scott Best stated that the US economy and financial markets need the “detox”.
Balance sheet
Fed also said that it begins in April, it will ratify a monthly hat in its balance sheet that it allows me to ripen to $ 5 billion. It will leave the hat on mortgage support, unchanged at $ 35 billion. Waller preferred to continue current tempo.
During the January meeting of the commission, various officials said it was expedient to stop the flow of the Fed residual balance until the federal government no longer stops against the ceiling of the treasury debt. In January, the United States hit the border.
Fed first began to slow down the tempo, during which it reduces the portfolio of assets in June to facilitate the possible tension in the money market interest rates.
– Jonnelle Marte from Help, Matthew BoSler, Vince Golle, Liz Capo McCormick, Laura Curtis and Craig Torres.
(Adds additional comments from Powell, from the tenth paragraph).
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