Federal Reserve officials during a December meeting sounded the alarm on inflation over Trump’s policies related to tariffs and immigration.
Joe Biden’s tax-and-spend policies utterly destroyed the US economy but the Federal Reserve is concerned about Trump.
When Trump was in office for his first term, inflation was consistently around 1.2%.
“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes of the FOMC’s meeting said. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”
CNBC reported:
Federal Reserve officials at their December meeting expressed concern about inflation and the impact that President-elect Donald Trump’s policies could have, indicating that they would be moving more slowly on interest rate cuts because of the uncertainty, minutes released Wednesday showed.
Without calling out Trump by name, the meeting summary featured at least four mentions about the effect that changes in immigration and trade policy could have on the U.S. economy.
Since Trump’s November election victory, he has signaled plans for aggressive, punitive tariffs on China, Mexico and Canada as well as the other U.S. trading partners. In addition, he intends to pursue more deregulation and mass deportations.
However, the extent of what Trump’s actions will be and specifically how they will be directed creates a band of ambiguity about what is ahead, which Federal Open Market Committee members said would require caution.
Last month the Federal Reserve cut interest rates by 25 basis points or 0.25% – as the Dow tanked by more than 1,100 points.
The December rate cut came after the Fed slashed rates 25 basis points in November and 50 basis points in September.
The benchmark rate is now between 4.25% to 4.50%
Fed Chairman Jerome Powell told reporters last month that he will not resign his position if Trump asks him to step down.
Reporter: "If [President-elect Trump] asked you to leave, would you go?"
Fed Chair Jerome Powell: "No."
Reporter: "Do you think that legally you're not required to leave?"
Powell: "No." pic.twitter.com/OoSDgvkZ8j
— Yahoo Finance (@YahooFinance) November 7, 2024
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