Michael S. Derby (Michael S. Derby) and Dan Burns (Dan Burns)
(Reuters) -Monald Trump, US President, said on Thursday that he hoped that the Federal Reserve would reduce interest rates at the time of suspension of the central bank and think that he knows monetary policy better than those policy setting currency policies.
Trump said in Davos, Switzerland on Thursday, said: "As the price of oil fell, I asked for a decline in interest rates immediately, and it should also be reduced in the world."
In the White House activities after these comments, Trump said: "I think I am much better than the interest rates they know than they know, and I think this must be much better than those who are mainly responsible for making decisions." Jerome Powell, the Federal Reserve Chairman, is the first appointment of the president as a federal leader.
Trump's remarks were five days before the Federal Reserve's first policy meeting held during the government period from January 28th to 29th. Officials were looking forward to officials that officials would remain unchanged.
The Federal Reserve's last time at the December policy meeting reduced its overnight interest rate target to a quarter of the target, to 4.25 % to 4.5 %.
Throughout 2024 in 2024, due to the reduction of inflation pressure, Fed officials realized that they hoped that monetary policy would have less restrictions on economic momentum, so the Fed's interest rate fell by one percentage. The December meeting also trimmed the estimates of the reduction of 2025 cuts in 2025. This is because people have high expectations for higher inflation and growth in their high growth rates.
Trump's comment on the Fed's interest rate policy is very unusual for modern presidents and conflicts with the design of interest rate policies independently. The Fed does not have to follow any instructions from the president, and does not immediately respond to the comment request.
Policy uncertainty
Many Federal Reserve officials including Powell have stated that they need to be cautious to reduce interest rates because of viscosity inflation. In the new forecast issued at the December Policy Conference, some policy makers have worked hard to consider the potential Trump policy. When the inflation rate is still higher than the 2 % target of the Federal Reserve, reducing interest rates may cause price pressure to deteriorate rather than improve.
New York Fed Chairman John Williams delivered a speech last week to make it difficult to provide guidance on monetary policy prospects around the uncertainty of government policy.
Williams said: "Economic prospects are still highly uncertain, especially in potential finance, trade, immigration and regulatory policies around potential finance, trade, immigration and regulatory policies. Therefore, our decision on future monetary policy actions will continue Based on data, the risk of economic prospects, and achieving our dual authorization goals. "
Trump's large -scale tariffs on US trading partners are actually imported taxes and his plans. In view of the views of many economists and investors, his plan to expel a large number of unlicensed immigrants and re -cause inflation. Real risk of stress. The question at that time was whether the Federal Reserve officials believed that the rise in prices was a one -time or more lasting rise, which in turn may require higher interest rates.
Some Federal Reserve officials believe that sufficient clarity may soon reach inflation to restore reduced interest rates. The Fedee Governor, Christopher Waller, quoted the recent favorable price pressure data and told CNBC on January 16: "If we continue to get such numbers, then there are reason to think that the tax rate may be reduced in the first half of the year."
Waller was selected by Trump as the federal government and worked in 2020. He also raised inflation to Trump's trade tariffs that many economists think. He said on January 8: "If I hope that tariffs have no significant or continuous impact on inflation, then they are unlikely to affect my views on the appropriate monetary policy."
Trump has widely criticized the Federal Reserve in the first two years of the term of his term to increase interest rates, and criticized Powell, and Powell has improved the efforts to lead the Central Bank of the United States. Powell's term will end in 2026. Before taking office, Trump said he was unwilling to dismiss Powell as soon as possible because it was possible to take action.
(Dan Burns, Michael S. Derby, Katherine Jackson and Trevor Hunnicutt; editors of Chizu Nomiyama and Deepa Babington))