Despite President Donald Trump's call for lower interest rates, investors reacted to the January inflation report by anticipating higher rates for longer. The report showed inflation exceeding forecasts, leading to stock market declines and rising borrowing costs. The Federal Reserve is now expected to maintain current interest rates, potentially even raising them, to combat persistent inflation.
Just before the release of Wednesday’s monthly consumer price report, President Donald Trump called for lower interest rates in a post on his Truth Social platform. “ Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!” he wrote. Upon the report’s release just a few minutes later, investors indicated they had other plans.
But the president has also sought to impose tariffs to extract concessions and raise revenues on the belief — which many economists dispute — that America’s yawning trade deficit is a sign of weakness. But those tariffs risk exacerbating the inflation that Trump promised to tame. In general, tariffs risk further raising prices as the importers pass on costs to consumers.
Economics FEDERAL RESERVE INFLATION INTEREST RATES TARIFFS ECONOMY
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