Trump exerts influence on the Federal Reserve for inflation, citing impressive figures
Revised Article
When's the interest rate drop? Trump pushes the Fed with "phenomenal" US inflation numbers
Got some spare time? Let's dive into the world of economics, where Trump's tweets and tariffs are making waves.
Consumer prices in the United States creep up at a slower pace than anticipated in May, despite the higher import tariffs. The annual inflation rate stood at 2.4 percent, according to the Labor Department, slightly lower than the expected 2.5 percent. Month-on-month, there was a 0.1 percent increase in living costs, mainly due to cheaper gasoline prices.
"Outstanding numbers!" Trump exclaimed through his Truth Social platform. Simultaneously, he urged the Federal Reserve to dive into a significant rate cut. "They should drop it by a full point. This would dramatically reduce the cost of our massive debt," he tweeted, emphasizing his points using capital letters.
Economy "Staff shortages" confirmed Economists are suspicious about US inflation figures
Experts are raising eyebrows, as they haven't spot any clear sign of the impact of Trump's substantial tariff hikes yet. Elmar Völker, an economist at Landesbank Baden-Württemberg (LBBW), noted, "The upward trend in US consumer prices remains a puzzle." Though businesses have admitted in surveys they aim to transfer tariff-related price increases to consumers—allegedly, retailers might still be peddling off their well-stocked inventories, masking the actual effects.
Economy Recall demanded German gold safety in the US has concern growing
The Federal Reserve, an independent US central bank, has decided against trimming the key interest rate—keeping it between 4.25 to 4.50 percent. The bank is wary about its influence on inflation and the labor market, as per its chairman Jerome Powell. The next interest rate decision is set for June 18, and many analysts believe any cuts might not occur until September.
Cyrus de la Rubia, the chief economist at Hamburg Commercial Bank, concluded, "The overall picture suggests that inflation is too high, and the labor market is too vibrant to warrant a rate cut next week, given the possibility of tariff-driven inflation." Facing the likelihood of a recession, rate cuts this year would only be feasible if the economy takes a significant hit.
SOURCE: ntv.de, jwu/rts
- Inflation
- Economic cycle
- Consumer prices
- Monetary policy
- Fed
- Donald Trump
- USA
Enrichment Data: In the economic dance between the Federal Reserve and the Trump administration, the Fed's decision to cut interest rates due to US inflation pressure from tariffs or any other factors depends on the current economic conditions, inflation, overall outlook, and recent forecasts. The Fed carefully monitors labor market conditions, inflation pressures, and financial developments to assess the most suitable monetary policy stance.
Though tariffs have had an impact on inflation in the past, recent data and Fed officials' comments suggest caution. Should the inflation data support it, analysts believe only a single rate cut may be possible in the latter half of the year. Regardless, the Fed is committed to ensuring maximum employment and stable inflation.
Ultimately, any interest rate decision will be based on comprehensive assessments of the economic outlook and incoming data rather than solely relying on tariffs or political demands.
- The Federal Reserve's decision to cut interest rates due to US inflation pressure from tariffs or any other factors depends on the current economic conditions, inflation, overall outlook, and recent forecasts.
- Trump's call for a significant rate cut from the Federal Reserve may only be feasible if the economy takes a significant hit, as the Fed is committed to ensuring maximum employment and stable inflation.
