Donald Trump REBUKED as US Federal Reserve defies White House calls to cut interest rates
The Federal Reserve has kept interest rates in the US unchanged despite facing pressure from President Donald Trump to cut borrowing costs.Earlier today, the central bank's Federal Open Market Committee (FOMC) voted to keep the Federal Funds Rate at a level of 4.25 per cent to 4.5 per cent.This decision from the Fed comes after gross domestic product (GDP) growth in the US came in higher-than-expected at three per cent, up from forecasts of 2.5 per cent.Analysts have noted the Federal Reserve's hesitancy's to cut rates comes from the Trump administration's tariff agenda, which has proven to be volatile for businesses.Speaking in the White House, the President said: "We're keeping the rates high, and it's hurting people from buying houses All because of the Fed."In recent months, Trump has publicly floated firing Fed chair Jerome Power if he failed to guarantee an imminent interest rate.Notably, the FOMC's members were divided when it came to considering whether an interest rate reduction was needed for the US economy.Fed Governors Michelle Bowman and Christopher Waller were both in opposition to keeping rates unchanged, having previously called on the central bank to recognise inflation has eased substantially from pre-Covid highs.Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.This represents the first time since late 1993 that multiple governors cast no votes on a interest rate decision.Following today's announcement, traders will be anxiously looking for hints as to what the Federal Reserve's direction will be at the next FOMC meeting in September.At a press conference this afternoon, Powell said: "We have made no decisions about September."We don't do that in advance. We'll be taking that information into consideration and all the other information we get as we make our decision." Analysts have noted that policymakers will be in receipt of two full rounds of employment and inflation data before the next September interest rates decision.On the FOMC's dissenting votes, Powell added: "This was quite a good meeting all around the table where people thought carefully about this and put their positions out there.LATEST DEVELOPMENTS:Economy alert: Major restaurant chain to close half of sites in blow to high streetBank of England must cut interest rates to save UK economy, IMF warns Rachel ReevesEconomy warning: UK trapped in 'debt doom loop' as borrowing hits 101% of GDP"You want that clear thinking and expression of your thinking, and we certainly had that today, I think, all around the table."In response to the Fed's decision-making, the S&P 500 saw its gains slip, despite an interest rate being widely expected by Wall Street traders.The stock market index fell by 0.1 per cent, while the Nasdaq jumped slightly by 0.1 per cent.Furthermore, the Dow Jones dropped by 164 points after the Federal Reserve's announcement.
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The Federal Reserve has kept interest rates in the US unchanged despite facing pressure from President Donald Trump to cut borrowing costs.
Earlier today, the central bank's Federal Open Market Committee (FOMC) voted to keep the Federal Funds Rate at a level of 4.25 per cent to 4.5 per cent.
This decision from the Fed comes after gross domestic product (GDP) growth in the US came in higher-than-expected at three per cent, up from forecasts of 2.5 per cent.
Analysts have noted the Federal Reserve's hesitancy's to cut rates comes from the Trump administration's tariff agenda, which has proven to be volatile for businesses.
Speaking in the White House, the President said: "We're keeping the rates high, and it's hurting people from buying houses All because of the Fed."
In recent months, Trump has publicly floated firing Fed chair Jerome Power if he failed to guarantee an imminent interest rate.
Notably, the FOMC's members were divided when it came to considering whether an interest rate reduction was needed for the US economy.
Fed Governors Michelle Bowman and Christopher Waller were both in opposition to keeping rates unchanged, having previously called on the central bank to recognise inflation has eased substantially from pre-Covid highs.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
This represents the first time since late 1993 that multiple governors cast no votes on a interest rate decision.
Following today's announcement, traders will be anxiously looking for hints as to what the Federal Reserve's direction will be at the next FOMC meeting in September.
At a press conference this afternoon, Powell said: "We have made no decisions about September.
"We don't do that in advance. We'll be taking that information into consideration and all the other information we get as we make our decision."
Analysts have noted that policymakers will be in receipt of two full rounds of employment and inflation data before the next September interest rates decision.
On the FOMC's dissenting votes, Powell added: "This was quite a good meeting all around the table where people thought carefully about this and put their positions out there.
LATEST DEVELOPMENTS:
- Economy alert: Major restaurant chain to close half of sites in blow to high street
- Bank of England must cut interest rates to save UK economy, IMF warns Rachel Reeves
- Economy warning: UK trapped in 'debt doom loop' as borrowing hits 101% of GDP
"You want that clear thinking and expression of your thinking, and we certainly had that today, I think, all around the table."
In response to the Fed's decision-making, the S&P 500 saw its gains slip, despite an interest rate being widely expected by Wall Street traders.
The stock market index fell by 0.1 per cent, while the Nasdaq jumped slightly by 0.1 per cent.
Furthermore, the Dow Jones dropped by 164 points after the Federal Reserve's announcement.
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