The US central bank is maintaining interest rates as expected. The benchmark interest rate is thus still in the range of 4.25 percent to 4.5 percent. The central bank, also known as the Fed, said this in a press release on Wednesday.
- Although fluctuations in net exports have affected the figures, recent indicators suggest that economic activity has continued to grow at a solid pace, the central bank wrote in the press release.
The Fed adds that unemployment remains low and the labor market solid, while inflation is still somewhat elevated. Henrik Olejasz Larsen, investment director at Sampension, calls another interest rate hike something that does not sit well with the White House.
- Trump has criticized the central bank governor, Jerome Powell, several times since his inauguration for holding back on interest rate cuts, he says in a written comment to Ritzau and adds:
- Therefore, we can almost expect, with a state guarantee, that today's interest rate announcement will give rise to new criticism and demands for interest rate cuts from the Trump camp.
Resists attacks for Trump
The Sampension director points out that the attacks from the White House against the central bank have created concerns among investors about the bank's independence.
- By maintaining the interest rate, Powell and the Fed are also sending a signal that they will not allow themselves to be pressured by the US administration, which may help to calm the markets in this regard.
Same tone says Las Olsen, chief economist at Danske Bank. He points out that by maintaining the interest rate, the bank continues to resist pressure from Trump. According to the chief economist, it is, among other things, Trump's own policies that stand in the way of interest rate cuts.
- There are concerns that tariffs will cause inflation to rise, that stopping immigration will lead to a shortage of labor, and that an even larger budget deficit will overheat the economy, says Olsen in a written comment to Ritzau.
/ritzau/
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