The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump’s massive tariffs had on inflation.
The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump’s massive tariffs had on inflation.
That’s not really the problem here though. The problem is that Trump and Republican policy is literally breaking the economy. Tarrifs cause inflation to go up while loosing jobs, while the feds policies can generally only address one at a time (lower interest rates -> jobs and inflation go up / increase interest rates -> jobs and inflation go down).
Ultimately Trump has screwed over the economy so bad, that in half a year he’s created an economic environment that the Fed can’t fix unless Trump walks back his trade war.
Edit: This is why the Fed is in a wait and see period, they expect things to get worse and don’t want to play their only card (rates decreases) too early. Trump continues to chip away at the economy and the Fed is about the only thing keeping us afloat.