The US central bank is maintaining interest rates. The central bank, also known as the Fed, wrote in a press release on Wednesday in the wake of a two-day interest rate meeting. This means that the benchmark interest rate remains in the range of 4.25 percent to 4.5 percent.
In the press release, the Fed writes about the decision that "recent indicators suggest that economic activity continues to expand at a solid pace". In addition, they point out that the unemployment rate has "stabilized at a low level in recent months, and that labor market conditions remain solid". The central bank notes that inflation "remains somewhat elevated".
At the last three interest rate meetings, interest rates have been lowered, but this time it is staying the course.
First interest rate announcement after Trump's inauguration
This is the first time that the central bank has made an interest rate announcement since Donald Trump became president of the United States. Trump wrote on his social media account, Truth Social, on Wednesday evening that the Fed has done "a terrible job" with regulating banks.
- If the Fed had spent less time on gender ideology, "green" energy and fictitious climate change, inflation would never have been a problem, he wrote.
According to AFP, Trump has been pushing for further interest rate cuts last week, but apparently without success.
- I will demand that interest rates be cut immediately, Trump said according to the news agency, adding that if the central bank did not take his views into account, he would "make a strong statement".
The central bank is tasked with determining monetary policy so that the economy is balanced and employment is as high as possible, while prices develop stably. One of its primary tools to achieve this is the interest rate on loans to banks. It can lower interest rates in an attempt to stimulate the economy. For example, it can help increase consumption and stimulate investment.
But the central bank can also raise interest rates and thus increase the cost of borrowing money and investing. In this way, they try to put a damper on the economy and inflation.
/ritzau/
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