U.S. interest rates hiked after Trump urged lower borrowing costs
· Toronto Sun
See more Toronto Sun on Google — save as a Preferred Source
The U.S. Federal Reserve ultimately didn’t listen to President Donald Trump on interest rates.
Visit milkshakeslot.online for more information.
On Wednesday, the country’s central bank hiked interest rates for the first time in three years, up a quarter of a percentage point to a range of 3 3/4% to 4% due to elevated inflation driven by higher oil prices and other factors.
Inflation in part has increased since the beginning of the year following Trump’s war with Iran and control of the Strait of Hormuz, a key Middle East shipping route that has slowed down due to attacks. The waterway accounts for roughly 20% of all oil exports.
High but stable this summer
Inflation has remained high but stable this summer at 3.4% in July and August and 3.5% in June.
However, economic data overall shows the U.S. economy is still performing quite well.
“Economic activity is expanding at a solid pace,” the Federal Open Market Committee (FOMC) said in a statement .
“While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.”
Quicker return to inflation goal
The committee said the rate increase will support a quicker return to its 2% inflation goal and help keep prices stable.
During a news conference, Fed Chair Kevin Warsh said inflation has been “too high … for too long.”
“We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed,” Warsh said . “Today, the FOMC decided that this standard has not been satisfied.”
Urged nominee to lower rate
In February, the president said Warsh – the Fed Chair nominee at the time – understood he should lower the rate and that he would not have been considered for the job otherwise.
“I think he does, but I think he wants to anyway,” Trump told NBC Nightly News’ anchor Tom Llamas . “I mean, if he came in and said, ‘I want to raise them …'”
Llamas interjected, asking Trump if Warsh would not have the job if he wanted to raise the rate.
“He would not have gotten the job,” Trump responded. “No.”
Warsh took office as the 17th chair of the Federal Reserve on May 22.
On Sept. 4, Trump posted to his Truth Social account that the country “should have the LOWEST RATE of any country in the World,” and threatened to stop trading with nations that have a trade deficit with the U.S.
“The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change,” Trump added. “High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!”
Trump has yet to comment about the interest rate hike.