President Trump's pressure on Jerome Powell and the U.S. Federal Reserve to lower interest rates is met with resistance due to ongoing tariff uncertainties. The Federal Open Market Committee remains cautious as they monitor the inflationary impacts of tariffs. Analysts believe Powell will maintain the rate at 4.25 to 4.5% until the market's response to tariffs is clear. Goldman Sachs anticipates potential rate cuts starting in September, which could positively influence the S&P 500 market index.
Despite President Trump's repeated pressure on Jerome Powell and the U.S. Federal Reserve to cut interest rates, ongoing tariff uncertainty may make the Fed reluctant to act.
Analysts suspect that continued uncertainty about the fundamentals of America's economy will keep Powell and the FOMC from cutting the interest rate.
Keeping inflation under control is one of the Fed's mandates, and voting members want to see how consumers and businesses react to tariffs.
Goldman Sachs is warming to the notion that the FOMC may start cutting from September and continue to normalize through 2026.
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