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Your guide to what US elections in 2024 mean for Washington and the world
Donald Trump raised pressure on the chairman of the Jay Powell federal reserve system to reduce the cost of loans and create a potential clash between two men less than a week before the US Central Bank meeting to determine interest rates.
During the performance in the Oval Office on Thursday, which signed several new executive orders, Trump said he knew rates “Much better” than the Fed and would like to see them descend “a lot”.
The US Central Bank is expected to have between 4.25-4.5 %next week, which will be a break after three consecutive cuts from September.
The Fed This year he signaled a slower pace of cuts with some officials who feared that Trump's plan to increase tariffs, mix taxes, and interventions against immigration would prevent the effort to defeat the inflation back to 2 percent.
“Worry.” [at the Fed] It is not only about tariffs, but also the recognition that fiscal policy will not help reduce inflation, ”said Mahmood Pradhan, economist Amundi.
However, a more cautious posture of the Fed's body puts it on a collision course with the new US President.
Trump He said on Thursday that he expected the Fed to listen to his requirements and talk to Powell “At the right time”.
“I think I know interest rates much better than them, and I think he is known, certainly much better than the one who is in charge of this decision,” Trump said. “If I disagree, I'll let it know.”
Trump promoted Powell to the Fed chair during his first term of office, but was often critical of him, especially because he did not cover fast enough in 2019. Before his term of office will expire in 2026.
“If the Fed continues to maintain rates where they are, and he thinks it would be great to get an increase from lower rates, then there is a real chance of conflict,” said Douglas Holtz-Eakin, President of the US Action Forum, Central Policy Institute .
Some economists have said that if Trump's policy increases prices, it could force the Fed to resist further cuts or even increase loan costs.
“If the administration does things that really start to increase the level of inflation, the Fed mandate is quite clear – raising rates.” And they get it in the throat [from Trump] If so, ”said Mark Blyth, professor of economics at Brown University.
Trump used a speech to managers in Davos earlier on Thursday to say that he wanted rates to come down “around the world” – and told cartels OPEC Reduce oil prices To make it happen.
A few hours later he touched the topic in his oval notes on reporters.
“I would like to see how oil prices decrease, and when energy descends, it will be a lot of inflation.” This will automatically reduce interest rates, ”Trump said.
On Thursday, he also raised new doubts about Washington's commitment to NATO and called for further expenses to defend the US allies in the contract.
“They protect us,” he said about NATO countries. “We protect them.” So I don't think we should spend, I'm not sure we should spend anything, but we should definitely help them. But they should increase their 2 percent [of GDP on defence spending] to 5 percent. ”
Trump's comments came the day after the newly swearing in the state secretary Marco Rubio “reaffirmed the American commitment to the group, according to the record of his interview with the Secretary of Alliance Mark Rutte.
Among other executive orders signed on Thursday was one of the creation of a national cryptocurrency supply and the other, which allowed the publication of federal writings on the assassinations of President John F Kennedy, former General Stand of Robert F Kennedy and Civil Rights leader Martin Luther King JR.
“Americans deserve transparency and truth about killing, Trump said. “Many people are waiting for it for decades and everything will be revealed.”
