The chairman of the US Federal Reserve Jerome Powell testifies before the hearing of the Committee Committee for Municipal and Municipal Residents regarding the “half -monthly monetary policy report to Congress”, at Capitol Hill, Washington, USA, February 11, 2025.
Craig Hudson Reuters
New York – Chairman of the Federal Reserve Jerome Powell He said on Friday that the central bank could wait to see how the aggressive actions of President Donald Trump play before it moves again in terms of interest rates.
WITH nerve markets As part of Trump's proposals, Powell repeated the statements that he and his colleagues recently made a monetary policy counseling among the high level of uncertainty.
The White House “is in the process of implementing significant changes in politics in four different areas: trade, immigration, fiscal policy and regulation,” he said in a speech for the American Monetary Policy Forum. “This is the net effect of these changes in politics will be important for the economy and the path of monetary policy.”
Noticing that “uncertainty around changes and their likely effects remains high” Powell said that the Fed “focuses on separating the signal from the noise as the perspective evolutions. We don't have to hurry and we are able to wait for greater clarity. “
Comments seem at least a bit contrary to the growing market expectations as to interest rate reductions this year.
Because the markets were based on the changing positions of Trump in his agenda – in particular his tariff plans – traders valued at the equivalent of three quarters of reduced percentage points until the end of the year, starting from June, according to June CME Group Fedwatch gauge.
However, Powell's comments indicate that the FED will be in waiting mode and see further rules before mapping.
“Politics is not at a fixed course,” he said. “Our current political position is well prepared for dealing with the risk and uncertainty that we stand with during the implementation of both sides of our double mandate.”
The Polityka Forum is sponsored by the Clark Center for Global Markets University of Chicago School and included many FED officials in the audience. Most decision -makers of central banks have recently said that they expect the economy to stop and inflation will return to the goal of 2%, with the atmosphere of the rate still unclear, because Trump's policy is more visible.
In his assessment, Powell also spoke in a positively positive macro environment, saying that the US is in a “good place” with a “solid labor market” and inflation returns to the destination.
He noted, however, that the last sentiment surveys showed disorder about the inflation path, mainly the Trump's tariff conversation product. . Preferred FED indicator He showed 12-month inflation at a speed of 2.5%, i.e. 2.6% when excluding food and energy.
“The path to the sustainable return of inflation to our purpose was bumpy and we expect it to continue,” said Powell.
Fed Governor Adriana Kugler, who was not on the forum, said in a speech delivered on Friday in Portugal that she sees “an important risk of inflation growth” and said “it may be proper to maintain the politics rate at its current level.”
Notes also appeared on the same day when the Department of Work reported Profit of 151,000 people in salary without farms on February. Although the sum was slightly below market expectations, Powell said that the report is more proof that “the labor market is solid and basically in balance.”
“Wages grow faster than inflation and a more balanced pace than before in returning to a pandemic,” he said.
Average hourly profits increased in February by 0.3% and increased by 4% during the year. The work report also indicated that the unemployment rate increased to 4.1% as employment in households decreased.