The tariff extinguishes will turn on the Trumpian paradox
US federal reserves will cut friendship and loan costs. This week’s meeting from the Central Bank’s monetary policy making committee was one of the most controversial in this new memory, featuring the newly installed White House Economic Advisor Stephen Miran as Governor with Lisa Cook, who was trying to be pursued by President Donald Trump by leaving an unfounded hypotek fraud accusation. The atmosphere like a circus only damages administrative goals.
Reduction of telegraphs and highly anticipated in benchmark interest rates, to between 4% and 4.25%, may occur faster. Conversely, Trump is complicated with matters with inflation rates and attacks on Fed’s independence. In the midst of repeated crying for cheaper money, the President has openly transforms the head of Jerome Powell because it is “late,” blocking the recovery of the housing market and the accompanying expenses.
However, the caution of Powell well. The consumer price index increased to 2.9% in August from the previous year, the highest reading for 2025. cars, clothing, food, and housing all became more expensive, with fears that interfere with a greater increase during Trump’s trade war.
The tension balance between inflation and weaker work may also give tips. The company cannot continue the overall extra tariff. The buyer who stretches contains about 30% of the bill and exporter 10% of that, while the importer includes nearly 60%, according to Piper Sandler analyst. With the addition of a jammed monthly work during the summer, The Fed now also focuses on growth, not just prices.
This towering rate can be less controversial. Miran, a Trump loyalist who has stated the desire to place the central bank under the scope of the executive branch, is a fox in Hen Fed’s house. By confirming his appointment, the Republic Senator also betrayed their lack of commitment to independence. Some federal courts have decided to oppose efforts to fire the chef, but the government encouraged the Supreme Court to decide.
The remaining central bank with the length of the elected officials is better able to resolve the macroeconomic emergency and act as a response to fiscal policy with less influence than political bias, a structure that is beneficial for investors. Consider some evidence from US bonds. The result of the 30 -year treasury record was 3.9% in mid -September 2024 when the Democrat Kamala Harris was the pioneer of the President even though the Benchmark Fed interest rate was more than 5%. Now traded around 4%. Trump’s desire to be recognized to make it cheaper to borrow directly contrary to his own actions.
Context news
The US Federal Reserve Monetary Policy Committee will be held on September 16-17 in Washington, where the Chairperson of Jerome Powell has hinted at a plan to reduce the benchmark interest rate by 0.25 points percentage to 4% and 4.25%.
Stephen Miran, who was on leave from his job as Chairman of the Presidential Advisory Council Donald Trump, will participate in the meeting after the Senate confirmed his appointment to the Federal Reserve Board of Governors on September 15.
Fed Governor Lisa Cook will also participate in the meeting of the Federal Open Market Committee after the US Appeals Court prevented Trump’s government to frub him on charges of mortgage fraud without evidence.
Source: Reuters
