Donald Trump's return to the White House is putting the US Federal Reserve (Fed) in a difficult position as it faces uncertainties from controversial policy proposals.
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| President-elect Donald Trump stressed that, if "used properly", tariffs would benefit the US economy. (Source: AFP) |
According to AFP , the return of Donald Trump to the White House and the uncertainties surrounding his policy proposals have begun to put pressure on the Fed. This has raised concerns about potential disagreements between the central bank and the US President-elect.
In a recent speech, Fed Chairman Jerome Powell said that Mr. Trump’s economic platform during the election campaign — which included threats of steep tariff hikes, expanded tax cuts and mass deportations of immigrants — was taken into consideration when the Fed’s interest rate-setting committee met to discuss the number of rate cuts expected next year.
After the meeting that ended on December 18, the Fed announced a further 0.25 percentage point interest rate cut and hinted that there would be only two rate cuts in 2025. Mr. Powell said that some Fed members pointed to policy uncertainty as the reason why they expected inflation to be more unpredictable.
“We don’t know which products will be subject to tariffs, from which countries, for how long, and to what extent. We also don’t know whether there will be retaliatory tariffs and what that will mean for consumer prices,” he added.
Mr. Powell has previously declined to comment on how the Fed would assess the impact of economic policy under the new administration. Meanwhile, Mr. Trump continues to assert that tariffs, when used properly, will benefit the U.S. economy.
The US central bank has a “dual mandate” from Congress to act independently to tackle inflation and reduce unemployment. But it still has to consider how the economy might be affected by government policies.
Source: https://baoquocte.vn/fed-dau-dau-de-chung-loat-chinh-sach-kho-luong-cua-ong-donald-trump-298281.html
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