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No more cuts allowed after Trump’s return following the first meeting


Federal Reserve officials decided to hold interest rates steady despite pressure from President Trump to drive them lower. The decision was influenced by concerns about inflation, which has been above the Fed’s 2% target for several months. Fed Chairman Jerome Powell is set to make remarks on the state of the economy and interest rates.

President Trump has been vocal about his desire for lower interest rates, breaking from the tradition of U.S. presidents avoiding public comments on monetary policy to maintain the Fed’s independence. Now that Trump has left office, the U.S. economy is still grappling with the Covid-19 pandemic, but inflation has decreased and the labor market has remained strong.

Analysts see signs of economic growth despite the challenges, with consumer spending holding steady and GDP growing by at least 3% for consecutive quarters. The Fed has lowered interest rates three times but may hold off on further cuts due to the complex economic landscape, particularly with the uncertainty surrounding Trump’s economic policies such as tariffs.

The Fed’s decisions this year may be influenced by the Trump administration’s policies, according to economists. These policies could potentially lead to higher inflation and threaten the Fed’s long-held 2% inflation target. The central bank faces the challenge of balancing borrowing costs to control inflation without risking a recession, as the economy navigates the end of the pandemic and the impact of Trump’s economic agenda.

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