US Central Bank shows caution with the beginning of the government of Donald Trump (Republican); The decision followed the expectation of the market
The Fed (Federal Reserve, the US Central Bank) decided on Wednesday (29.jan.2025) to maintain the interval of the basic interest rate at the level of 4.25% to 4.50% per year. This is the statement (PDF – 195 KB).
The decision followed the expectation of the market, according to economists consulted by. It is the lowest interest rate in the US since December 2022. This was the 1st meeting of the Federal Open Market Committee), the US Central Bank Monetary Policy Committee since the inauguration of Donald Trump (Republican). The decision was unanimous.
“The committee seeks to reach maximum employment and inflation at the rate of 2% in the long run. The committee believes the risks to achieve their employment and inflation goals are practically balanced. The economic perspectives are uncertain, and the committee is aware of the risks for both sides ”said the FOMC in a statement.
The US monetary policy committee also declared to be “Prepared to adjust monetary policy orientation as appropriate if risks arise that prevent the goals from meeting”. According to the statement, the FOMC will consider information about the labor market and perspectives of inflation to base the next decisions. The rate, outside the target of 2% per year.
US President Donald Trump (Republican) previously said that the country’s interest rates should be reduced by the Fed, but the monetary authority follows cautiously. In September, Central Bank President Jerome Powell signaled the possibility of rate cuts by 2025 – which was not held at the 1st meeting of the year – after.
The meeting of this Wednesday (29.jan) also marks a return of the relationship between Trump and Powell. The Powell Republican for the Fed Presidency in late 2017, but began to criticize him after proceeding with interest increases, which Trump disagreed.
Back in the White House, the president will have to choose again who will command the Central Bank, as Powell’s mandate expires in May 2026. Trump has already stated that he will not go back to office.
Super 4th Interest Fair
In addition to the US monetary authority, the Brazilian Central Bank also discloses the interest rate decision on Wednesday (29.jan). Copom (monetary policy committee) is expected to increase the rate at 1 percentage point from 12.25% to 13.25% per year.
For the first time in this government, those appointed by the President (PT) at the Copom meeting: of the 9 seats that make up the collegiate, only 2 were appointed by (PL), its predecessor. It is also the 1st meeting with Gabriel Galipolo in the presidency of the monetary authority.
The monetary authority had already signaled in 2024 the rise of 1 percentage point at the 1st Copom Meeting in 2025. It is expected that this will be repeated at the next meeting in March.
Selic is the basic interest rate of the Brazilian economy. Directly influences the rates charged for loans, financing and investments. In the financial market, impacts the income of investments.
