Federal Reserve, Inflation and Donald Trump
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The Federal Reserve is likely to keep interest rates on hold in the near term following another inflation reading that didn’t make things any easier for the central bank. A new look at the Consumer Price Index (CPI) for the month of April showed that prices remained sticky despite some signs of cooling,
Efforts to stem inflation in the cost of services didn’t show much progress in April even though airfares continued to fall. That will help justify the Fed’s continued wait-and-see approach to cutting interest rates,
Tamer-than-expected inflation and a significant de-escalation of a U.S.-China trade war are easing fears of a sharp squeeze on American households and businesses in coming months, prompting Wall Street firms to pare predictions of a recession and giving the Federal Reserve room to leave interest rates where they are.
US Treasuries gained after a closely watched inflation report came in below expectations, offering support for wagers on at least two Federal Reserve interest-rate cuts this year.
The inflation backdrop improved in April, with a slight annual decrease reflected in the consumer-price index based on a 2.3% yearly rate. But that doesn't necessarily give the Federal Reserve an all-clear to cut rates next month,
Inflation slows to its lowest in three years, offering relief to consumers with signs of price stabilization across sectors like food and energy.
Less than a week after President Donald Trump shocked the world with his massive “Liberation Day” tariff hikes, the former president of the St. Louis Fed, Jim Bullard, uttered a word on television that most economists reserve for their nightmares: Smoot-Hawley.
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