President Trump is advocating for the Federal Reserve to reduce interest rates as new tariffs on goods from Mexico and Canada go into effect in April. The Fed, however, has defended its decision to keep rates unchanged, citing heightened uncertainties linked to Trump's trade policies, particularly their impact on inflation. While the current unemployment rate is stable at 4.1%, the Fed has expressed concerns over weak economic growth in the coming years, forecasting two rate cuts later this year primarily due to sluggish growth rather than inflation relief.
President Trump urged the Federal Reserve to cut interest rates to support the economy amid the implementation of tariffs on goods from Mexico and Canada.
Federal Reserve Chair Jerome Powell defended maintaining interest rates, citing heightened uncertainty from the Trump administration's trade policies, which are impacting inflation and economic sentiment.
Powell warned that Trump's import tariffs have contributed to rising inflation rates, currently at 2.7%, and could further affect consumer prices.
Despite low unemployment rates, the Federal Reserve projects that the coming years could see the weakest economic growth since the end of the last recession.
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