Federal Reserve is not based on interest rates as Trump’s fare uncertainty still reigns

• Almost everything from Wall Street provided the Fed It would remain in monetary policy, as current economic data are still relatively strong. A possible scenario worse, would involve the rates that cause a “scam”, the dreaded combination of highest prices and the increase in unemployment that the central banks put in a difficult position.

It Federal reservation Still does not have to move interest rates by 2025 as the Central Bank continues ”Wait-and-See“Approach after President Donald Trump’s rates.

Following Wednesday’s meeting, the Central Bank announced that it would maintain the federal fund rate, which banks use to borrow from each other at night, between 4.25% and 4.5%. The Federal Reserve is still waiting greater clarity As to where the economy can be directed, taking into account all the changes to the trade policy of the United States.

“The uncertainty about economic perspectives has increased even more,” the Fed said in a statement published on Wednesday.

In another update of the March Declaration, the Central Bank said that policymakers determined that the risks for both the highest unemployment and the higher inflation had increased, a reference to the dreaded combination of “stagnant. “”

The stationed withholding rates were almost completely awaited. Almost everything in Wall Street announcedsed has been reported has has been reported has hashedage had hashedage has been hashed The FED would remain in monetary policy, as current economic data are still relatively strong.

“ The inflation box is still high and it is hooking and unemployment is still relatively content, so the Fed does not have the ingredients needed to reduce rates, ” Chris Brigati, director of investment in the Texas financial and financial services company company, wrote in a note on Wednesday morning.

Trump’s chaotic chaotic shot Roiled markets at the beginning of last month and has caused outstanding measures of Consumer feeling to immerse –S. The last edition of the Beige bookA summary of the activity and economic conditions of the FED’s regional banks, emphasized the uncertainty “perverse” and a deterioration of the perspectives.

These bad vibrations still need to be encompassed in what economists call the “hard data”, the key economic measures dictated by the FED’s decisions. A louder April than expected Report of jobs underlined the Apparent resilience From the north -American economy, which added 177,000 positions instead of the 135,000 street. In the meantime, the unemployment rate remained unchanged at 4.2%.

And while the Fed’s preferred inflation measurement He came in At 2.3% in March, its lowest level since inflation increased to the maximum of four decades by 2021-22, remains above the goal of 2% of the Central Bank. Then there is the potential impact of Trump’s rates.

Fed President Jerome Powell has acknowledged that the Central Bank would normally be seen through a single stroke or “transient“Increased prices from an increase in import taxes. In a speech Last month at the Chicago Economic Club, however, he said that Trump’s recent rates would probably be a greater inflation and slower growth if they remained at their current levels.

“At the moment, we are well positioned to expect greater clarity before we have the adjustments to our political position,” he said.

What will the Fed do next time?

Powell’s comments indicated the worst of cases of the so -called “stagnant“When inflation increases, but unemployment also increases. Powell acknowledged that it would be double-man from the Fed” in tension “, as the Central Bank increases interest rates to combat higher prices, but reduces them to stimulate economic activity.

“We continue to believe that the FED will prioritize labor market protection by the end of the year, if and when the hard data becomes,” Mike Sanders, Madison Investment Fixed Income Chief, wrote, wrote on a note on Wednesday morning.

At Wednesday meeting, traders were priced at 99% chance of keeping rates unchanged according to the CME group Fedwatch tool. FED Funds have made a probability of about 70% in the Central Bank doing the same in June and are priced at two to four cuts by the end of the year.

“The fare situation is extremely fluid and unpredictable,” Brigati wrote, “therefore it would be irresponsible for the Fed to try to respond to the rates when the situation can change dramatically and their actions could have the impacts planned or even worse a detrimental effect.”

Powell also said that this type of trade policy has no modern precedents. The U.S. Effective Effective Rate rate is now 28%, its highest level since 1901, conform in the Yale budget laboratory.

Trump administration has sent mixed messages On the perspective of commercial offers in recent weeks, but Treasury Secretary, Scott Bessent and United States commercial representative Jamieson Greer will meet with Chinese counterparts this week. It is a first step in de-escaping tensions after the United States struck a 145% rate in most property in China, which caused Beijing to resume a 125% tax on American imports.

Powell and Fed have been repeatedly critical For Trump, who has been forceful to reduce loan costs for the North -Americans. However, the President recently supported threats to say goodbye to the Fed’s chair, which scared investors in the middle of central bank fears Daring independence Could be under threat.

This story originally presented to Fortune.com

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