The Federal Reserve is nearly certain to keep its key interest rate unchanged at its policy meeting this week, just a few days after President Donald Trump said he would soon demand lower rates.
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At the same time, Fed officials are also navigating a delicate period for the economy: They want to keep borrowing costs high enough to push inflation back to their 2% target, without keeping them too high for too long and plunging the economy into a recession. Vincent Reinhart, chief economist at BNY Investments and a former top economist at the Fed, said Powell won't let Trump's attacks affect his policy decisions.
“In January, we kind of need to see what’s going to happen," Fed governor Christopher Waller said earlier this month in an interview on CNBC. Fed officials “need to see a little more progress on inflation,” he added, though he also said it is getting “very close” to their target., only modestly above its goal, but it has been stuck there for about six months. Still, there are signs that prices should cool later this year.
Fed officials in December signaled that they expected to reduce rates just twice this year. But the 19-member committee that makes interest rate decisions is clearly divided. Some officials, such as Waller and Austan Goolsbee, president of the Fed's Chicago branch, expect inflation to keep cooling and argue that the Fed's rate doesn't need to be so high.
Jerome Powell Vincent Reinhart Austan Goolsbee Beth Hammack U.S. News Business Joe Biden Donald Trump Kevin Warsh Jeffrey Schmid
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