.jpg)
Federal Reserve Chairman Jerome Powell is a touch on the stubborn side. He does not want to change the interest rate policy of the central bank unless it is really necessary.
It was very clear in a speech in Washington on Friday that it was not believed that the reduction of the prices of the Federal Reserve is necessary. He preferred a lot to wait until the next meeting of the Federal Open Market Committee from May 6 to 7.
Do not miss this step: Subscribe to the free daily newsletter of Thestreeet
“Although uncertainty is still high, it has now become clear that the customs tariff increases will be much greater than expected. It is possible that the same thing will apply to economic effects, which will include higher inflation and slower growth,” Powell said to the annual meeting of the Business Liberation Association.
It is also true that President Trump wants the Federal Reserve to reduce prices now, and the complaint was in a very slow Powell publication.
Related: The veteran fund manager reveals 4 methods that can rise the market
(It should be noted that Trump also complained about Powell in 2019, and he wonders about who was an enemy, Powell or China President Xi Jinping.)
Does a lot happen?
However, the Federal Reserve Chairman wants clarity before he asked FOMC members because there are many cases at the same time:
- Definition decisions were greater than expected and may not be fixed.
- The economy may weaken very quickly and cause chaos in the financial markets.
- Treasury Secretary, Scott Bessen this week, warned that the government will implement money to pay its bills in May or June unless the nation’s debt extends.
- The possibility of extension of Trump tax exemptions and effects on government debt levels.
The question is whether all these problems will prove that they are so big and dangerous that the Federal Reserve will have to move in prices sooner than we think.
The Standard & Poor’s 500 has lost more than 10 % in two days since the Trump tariff was announced. The nasdaq pointer is more than 11 % in the same days.
I am the latest survey from the American Association of Individual Investors (AIII), descending knowledge, which has been defined as a decrease in stock prices over the next six months, by 9.8 % to 61.9 % in the last week.
This decline is the third highest ever and the worst since March 5, 2009, when it reached 70.3 % amid great financial crisis disorders. (Note: S & P 500 bottom after four days.)
At the same time, there are reports on the demobilization of workers, signs that consumers hinder spending, and complaints by business leaders that planning for the future is impossible.
Costco in bulk ((Assign)) Until Thursday, it was 5.2 % on Friday. Tesla Elon Musk ((Timing)) It was outside 10.4 %. Wall Mart bone ((WMT)) More than 4 % slip.
But Powell does not believe that the Federal Reserve should behave now. Perhaps the best word is “so far.”
The great fear is that the definitions will not achieve President Trump’s goals and dreams in the new American prosperity, but will lead to a tremendous revenge that produces terrible global effects similar to what happened after the United States enacted Smoot-Hawley’s tariff in 1930.
The Federal Reserve will enter when it needs
The Federal Reserve can hold emergency meetings if things are about to get out of control.
To combat pseudonym in 1979, the Federal Reserve, led by Paul Volker, agreed to serious measures that highly reinforced interest rates that mortgage rates are approaching 20 %.
During the reign of Board of Directors Ben Bernanck, the Federal Reserve paid higher prices to obtain a “normalization” after a bust of Dot.com and the effects of the September 11, 2001 attacks.
More economic analysis:
- The price of gold hit the stumbling block. Where do you go from here?
- 7 fast food from the notes of the Federal Reserve Chairman Jerome Powell
- Retail sales add new complications to the expectations of reducing federal reserves
But the madness of housing produced an enormous extra construction, and the mortgage crisis appeared under the mortgage as the worst financial disaster since the great depression. Things were moving very quickly with a little federal reserve reaction that CNBC commentator Jim Kramer had erupted with his famous “They don’t know anything!” bravado.
Finally, Bernanke and The Fed had to intervene in an attempt to stabilize the banking system, a task that requires 18 months to achieve. (Critics still argue that this step was very few and very late.)
A price reduction and other measures to help the economy overcome the Covid-19 in the emergency meeting in March 2020.
Related: Director of Veteran Funds Issues of Dire & P 500 Warning for 2025
