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Category: CRYPTO NEWS
The post Federal Reserve might cut rates because of Trump’s tariffs appeared on BitcoinEthereumNews.com. The Federal Reserve might be forced to cut interest rates if president Donald Trump’s tariffs push inflation higher. Officials at the Fed held rates steady in January, but the new meeting minutes released on Wednesday showed some serious concerns about Trump’s latest tariff threats on cars, semiconductors, and pharmaceuticals. The Federal Open Market Committee (FOMC) agreed that trade policies could keep inflation above the central bank’s 2% target, delaying their plan to ease monetary policy. Speaking to reporters on Tuesday, president Trump said he’s considering a 25% tariff on key imports, a move that could hit supply chains and drive up prices across industries. According to the Fed’s minutes, officials warned that businesses would likely pass higher costs onto consumers, which could force the central bank to keep rates high for longer—or eventually cut them if economic conditions worsen. Fed warns tariffs could stall inflation fight “The effects of potential changes in trade and immigration policy, as well as strong consumer demand, were cited as risks to the inflation outlook,” the January minutes said. Officials pointed out that businesses across many Federal Reserve districts reported concerns about tariffs driving input costs higher, leading to price hikes on consumer goods. The minutes said: “In support of its goals, the Committee agreed to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. Members agreed that in considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee would carefully assess incoming data, the evolving outlook, and the balance of risks.” Trump’s trade policies complicate Fed’s decisions Trump’s latest tariff plans would expand existing duties and introduce new ones on autos, pharmaceuticals, and semiconductors— all sectors that are very important to the US economy. The president has already imposed some…
2025-02-20T04:42:13+00:00