“Stable prices and maximum employment.” Jerome Powell repeated again and again on Tuesday the mantra that guides his work at the head of the Federal Reserve in the Biannual Control session
The maxim served him so much to overcome the capes that the Democrats tended to criticize Donald Trump, as if to make it clear that he will not yield to the pressures of the president of the United States, which he insisted again in a message sent at dawn in which he went down the interest rates in the next meeting of the Fed, scheduled for the end of July. Powell also got brightness during his appearance to another of his favorite phrases: he touches, insisted, “wait and see” what effects the Trump tariffs will have
In a tradition that is repeated twice a year, Powell spoke first to a committee of the House of Representatives and on Wednesday he will do so before the Senate. That he did not bring too many surprises in his visit to the Capitol, it was clear since his opening intervention, which sounded very similar to the words I pronounced last week when the Fed again ruled out a decrease in the types: “Despite the high uncertainty, the economy is in a solid position,” he said, before undergoing the questions of the parliamentarians. “The unemployment rate remains low and the labor market is in or close to the highest level of employment.”
“If it turns out that the inflationary pressures remain controlled,” he added, “we will reach a point where we will cut sooner rather than later,” he told the congressmen, although at a time in a row, and perhaps in advance to their questions, he added that he was not in a position to “point out a meeting [de la Fed] in particular ”in which that descent will be produced.
Two or three points less
The day had started for Powell with something already familiar to this quiet man: with a Trump barrage. The president of the United States was released in a message from his Truth social network, before abriving Israel and Iran for playing with the fragile high the fire that the president in his message, the US president referred to the president of the Fed as “The always too late Jerome Powell. “” Without inflation, with an excellent economy; We should have at least two or three points less. (…) I hope that Congress tighten the nuts to this stupid and stubborn person. We will pay for your incompetence for many years. ”
Several Republican congressmen asked Powell about his caution when lowering the guys, but did not echo Trump’s most radical rhetoric. They did go to the argument, the president’s favorite, that European central banks act more ease than the American. “The reason we are not following that rhythm are the forecasts we have,” said the economist. “All professional analysts that I know, both external and ours, expect a significant increase in inflation throughout this year.”
The Fed decided last week to maintain interest rates at 4.25%-4.5%. In addition, their updated their predictions on the US economy: they foresee less growth, more inflation and only reduce the types of 0.5 points until the end of the year, possibly in two cuts of 0.25 points, although that is not clear yet.
After that announcement, the governor of Fed Christopher Waller declared last Friday in a television interview that he believes that the Central Bank is in a position to start lowering the guys from next month. Waller, named, as Powell, by Trump in his first term, stressed that it was only a personal opinion.
He lacked to add that it is a opinion that investors do not share. , the probability that the types will fall in July was this Tuesday of 18%. It is a percentage that is expected to fall as the date of the next Fed meeting approaches, and that does so at the same rate as the possibility of a last minute surprise.
