American buyers can face higher prices if US President Donald Trump goes ahead with some of his proposed prices, the American Central Bank said.
A few minutes from the January meeting of the Federal Reserve published on Wednesday, the members of its committee thought that Trump’s policies could “hinder the disinflation process”.
“Trade contacts in a number of districts had indicated that companies would try to transmit higher contribution costs to consumers resulting from potential rates,” said the minutes.
The release of comments comes as the Fed faces Trump criticism for not having reduced interest rates earlier after leaving rates unchanged at the January meeting.
The Fed minutes have also revealed “a high uncertainty concerning the scope, the calendar and the potential economic effects of the possible changes in commercial, immigration, budgetary and regulatory policies”.
“A couple of participants pointed out that, in the coming period, it could be particularly difficult to distinguish between relatively persistent changes in inflation and more temporary changes that could be associated with the introduction of new government policies” , added the minutes.
The Fed minutes have also shown that the preparation of the central bank to maintain stable rates in the midst of obstinate inflation and the uncertainty of economic policy.
The central bank left the key interest rate unchanged in a range of 4.25% to 4.5% at the January meeting, reaching a break after a series of discounts at the end of last year.
The president of the Fed, Jerome Powell, previously said that the bank was not “in a hurry” to reduce more, given an important uncertainty about the place where the economy could go
Analysts predict that the Fed will probably reduce the benchmark interest rate only once in 2025, with a large possibility of any rate drop.
The promises of Trump’s campaign included calls for lower interest rates, which would bring alleviation to borrowers.
This has aroused a debate to find out if he will respect the Fed independence tradition, which is supposed to focus on long -term health of the American economy and far from politics.
Powell previously told journalists that he had “no contact” with Trump and that the bank was focused on fixing rate data.
But the questions with which Powell has been faced on how the Fed manages a new command of the White House to cancel diversity programs – and why he had retired from a global group of central banks focused on the risk of change Climate in the financial system – stressed the challenges he will face to keep the bank above the political fray.
