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The US Federal Reserve has kept its interest rates steady after its most recent FOMC meeting. The US central bank’s inaction is because of good economic news.
Fed stays steady
The US Fed left its interest rate in the range of its goal of 2% at its FOMC meeting. The agency is keeping the benchmark amount steady because of the US economy’s steady growth and low unemployment. However, the Fed noted that it may raise the percentage at the end of the year.
Trump’s fight with the Fed
The Fed has been criticised by US President Donald Trump over the last few months. He has chastised current chair, Jerome Powell,for raising interest rates when the stock market was volatile in October. President Trump felt that Powell made a mistake with the hikes and even said the Fed was ‘loco’.
‘Because we go up, and every time you go up they want to raise rates again. I don’t really – I’m not happy about it. At the same time, I’m letting them do what they feel is best,’ said Trump.
The Fed has prided itself on being independent of the US president and politics. Powell has answered Trump’s impassioned rebukes with a calm response.
‘We have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns,’ said Powell.
What the Fed may do next
The Federal Reserve may have interest rate growth regardless of how the economy performs in 2019. Powell could possibly implement a gradual uptick to control inflation. Financial analysts fear that the hikes may make banks raise their interest rates and cause a recession. Regardless of what actions the Fed takes in 2019, investors will be watching to see how they affect Wall Street.