Fed Decision Could Lead To Collision With Trump.聯準會持續觀望降息，與川普衝突恐難免~~

114.7.5(六)Samedi 5 juillet 2025

The central bank’s resolve in the face of what has been an unrelenting pressure campaign from the president was on full display Wednesday. Policymakers held interest rates steady for a fourth straight meeting, and nearly half of them signaled in new projections less scope to cut interest rates this year in anticipation of resurgent inflation. The Fed’s benchmark interest rate is currently in a range of 4.25% to 4.5%.

Powell was also unwavering in his message that the Fed can afford to take its time on interest rate cuts and will stick to a “wait-and—see” approach until officials have more clarity about how Trump’s policies are affecting the economy.

That could take months, keeping the White House and the Fed on a collision course that economists say stems directly from Trump’s policies, including his global trade war.

“They want to wait at this point because they’re caught between a rock and a hard place with tariffs,” said Jay Bryson, chief economist at Wells Fargo. “It’s a supply shock. It’s going to simultaneously raise inflation while raising the unemployment rate.”

Neither of those things have happened, yet, putting the Fed in an awkward position as it stands pat in anticipation of an economic shift that has not yet materialized. Price pressures have stayed surprisingly muted and the labor market, while softer, is still on relatively solid footing.

For Trump, there appears to be no barriers for the Fed to lower interest rates, as other central banks around the world have done. On Thursday, the Swiss National Bank slashed borrowing costs to zero. But for the Fed, it is just a matter of time before inflation starts creeping back up even as growth takes a hit, making it imprudent for it to take action right now.

“The Fed has sought refuge in data dependence amid a whirlwind of shifting trade, tax, immigration and regulatory policies. But the longer it keeps the Fed funds rate unchanged, the more political pressure is likely to build,” said Gregory Daco, chief economist for the consulting firm EY-Parthenon.

Trump has maintained that rate cuts are essential for the country’s future finances, since the actions of the Fed influence the amount that the government must spend to issue and service its debts through the sale of bonds. (Colby Smith and Tony Romm)