The Fed is trying—again—to size up Trump
Subscribe to enjoy similar stories. Federal Reserve Chair Jerome Powell is walking an old tightrope into 2025: He is trying to avoid appearing confrontational with Donald Trump, even though some of his colleagues are signaling unease that the president-elect’s policies might rekindle inflationary pressures. The difficult balancing act was on full display over the last two months.
In early November, days after Trump’s election to a second term as president, Powell declared that the central bank wouldn’t set interest rates based on assumptions or speculation about the incoming administration’s policies, including possibly transformative changes to trade and immigration policy. “We don’t guess, we don’t speculate, and we don’t assume," Powell said at a Nov. 7 news conference.
But the central bank also often says that its interest-rate policies need to be “forward looking"—taking into account projections of future price pressures and employment conditions—because it takes time for changes in borrowing costs to filter through the economy. Powell and his colleagues provide a steady diet of commentary to help investors understand how the Fed might react to any number of economic outcomes. The Fed cut rates by a quarter point last week, bringing its policy rate down by a full-percentage point since September.
Read more on livemint.com
