The Federal Reserve Bankers remain convinced that the continued gradual increase in interest rates is the best formula for preserving the stability of the economy. This is clear from the last meeting minutes of Fed.
This may not be good for the US President Donald Trump, who has already criticized the central bank’s actions several times.
From the minutes of the last Federal Reserve meeting, which took place on September 25-26, it is clear that bankers have confidence in the growth of interest rates, but are somewhat hesitant about the impact that duties may have in the future.
After all, the vote on raising interest rates was unanimous, indicating that this policy of a gradual increase in interest costs would continue.
The participants in the meeting have indicated that the further gradual increase in interest rates is likely to be in line with sustainable economic expansion, strong labor market conditions and inflation close to 2% over the medium term.
The Federal Reserve’s decision to continue raising interest rates faces President Trump’s increasingly fierce criticism.
While most presidents so far avoided public comment on monetary policy, Trump does not bother calling Fed members crazy, criticizing the central bank governor Jerome Powell, arguing that higher rates are a threat to economic recovery.
“Despite optimism, there are factors that drive businesses to give up investment opportunities, such as labor shortages and trade policy uncertainties”, states the Federal Reserve. “In particular, duties on aluminum and steel limit investments in the energy sector. The companies also seek to diversify the risk associated with the trade conflict by choosing to trade with more countries, both in terms of imports and exports”, adds the US central bank.
The Fed also noted that future monetary policy actions “will depend on the assessment of inputs and their implications for the economic outlook”.