MercoPress. South Atlantic News Agency

Fed leaves rates unchanged with a message to Trump, “in no hurry to adjust policy stance”

“I’m not going to have any response or comment whatsoever on what the president said,” Powell said’ “It’s not appropriate for me to do so.”

The United States Federal Reserve left interest rates unchanged following the two day meeting with Fed chair Jerome Powell emphasizing at the press conference that “the bank is in no hurry to adjust its policy stance, since the US economy remains strong”.

Recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated, indicated the Federal Open Market Committee in its official release.

Powell also said on Wednesday that he has had “no contact” with Trump since the president said last week that he would “demand that interest rates drop immediately.”

“I’m not going to have any response or comment whatsoever on what the president said,” Powell said’ “It’s not appropriate for me to do so.”

However Powell did point out that looking ahead there is a wide range of possibilities when it comes to the potential effects of tariffs.

“The range of possibilities is very, very wide,” he said. “We don’t know for how long or how much, what countries. We don’t know about retaliation. We don’t know how it’s going to transmit through the economy to consumers. That really does remain to be seen.”

“The best we can do is what we’ve done, which is study up on this and look at the historical experience, read the literature and think about the factors that might matter,” Powell continued. “And then we’ll just have to see … how it goes.”

But, “the public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals and really keeping our heads down and doing our work.”

Finally Powell said the Fed will need to see “real progress on inflation or some weakness in the labor market before we consider making adjustments.”

“The committee’s 2% inflation goal will be retained and will not be a focus of the review,” Powell told reporters Wednesday.

However it must be mentioned that most other central banks in developed countries are cutting their interest rates. The European Central Bank, for example, is widely expected to reduce borrowing costs at its next meeting, the Bank of Canada said Wednesday it has also cut its rate, and the Bank of England is also expected to do so next month.