قالب وردپرس درنا توس
Home / Business / Trump's guidelines, not his insults, contributed to the Fed's Shift

Trump's guidelines, not his insults, contributed to the Fed's Shift



Mr. Powell, on the other hand, said Wednesday that the economic outlook was aggravated by reasons not related to Fed's policy. He pointed out storm clouds, including financial weakness in China and Europe, and tight economic conditions, as well as the impact of Mr. Trump's policies.

He made the nuanced point that the Fed still sees solid economic growth as the most likely outcome for the coming year, but that result is now somewhat less likely.

"At such times, sense of risk management patiently suggests," he said.

The persistent weakness in inflation, which has been below the Fed's preferred 2 percent annual pace since the 2008 crisis, also played a role. Mr. Powell said the Fed had the luxury of being patient because the risk of higher inflation "seems to have been reduced."

"It seems that what happened is the Fed says:" We are more concerned with secular stagnation than inflation at the moment, "said Lewis Alexander, boss's American economist at Nomura." And I seem to be quite honest "It is an entirely reasonable place for them to be."

Analysts said the negative reaction of financial markets after the Fed's last December meeting was a particularly important factor. The Fed raised prices and predicted two further increases in 2019. Powell also emphasized Fed's commitment to reduce bond holdings, which some investors saw so aggressively.

"They planned to roar with this balance, and the market is like:" Oh, my God! It will crush the economy! "Said Julia Coronado, a former Fed economist and president of macro-political perspectives." And then they recalibrated. Abrupt. "

Mohamed A. El-Erian, finance director of the finance company Allianz, said that the Fed decision Wednesday" came as absolutely no surprise. "Since the global financial crisis, he said the Fed has supported every time investors protested against monetary tightening.


Source link