Politics makers said at a meeting about a week after January that President Donald Trump’s preliminary policy proposals have caused anxiety about the federal reserve on high inflation, as companies at the US Central Bank tell that they generally expect to raise prices on the cost of import tariffs. 20 opening.
Participants at the US Central Bank meeting on January 28-29 “generally referred to the risks of upwardness on inflation,” instead of the risks to the labor market, according to the minutes issued on Wednesday. “In particular, the participants pointed to the potential effects of potential changes in trade and immigration policy, and the possibility of geopolitical developments to disrupt supply chains, or the strongest family spending expected.”
While he still trusts that prices will be reduced in the coming months, “other factors have been cited as they have the ability to impeding the inflation process,” the minutes said, including the fact that “commercial communications in a number of regions (Fed) Companies have indicated the costs of the highest inputs of consumers arising from possible definitions.
Participants also indicated that some of the inflation expectations, which are a major concern for the Federal Reserve, were “increased recently.”
The financial markets have not changed a little after the issuance of the minutes, as the future contracts for the interest rate indicate the most likely, and perhaps only, the reduction of the rate of 2025 will occur in July. American stocks decreased between gains and slight losses.
Political makers agreed at the meeting last month that interest rates must be fixed in order to be clear that inflation, which has stopped significantly since mid -2024, will decrease based on the central bank’s goal by 2 percent.
The uncertainty surrounding Trump’s plans added to their frequency to reduce prices more.
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“It is clear from the minutes that price discounts do not occur any time soon, and the federal reserve is likely to wait for some dust on customs tariffs before providing better directives forward,” said Ryan Sowet, chief American economist in Oxford Economic. “The minutes support the recent changes in our founding line expectations that the Federal Reserve will be cautious this year, which reduces prices only once in December.”
Sweet indicated that it had hinted that there may not be much more space, given the uncertainty about where the appropriate stop point may be at the Federal Reserve.
Federal reserve staff has already changed their view of his meeting from December 17 to 18 to show slower growth and higher enlargement based on the “assumptions of the deputy elements” about Trump’s potential behavior when his second term began in the White House. The president began providing details in his early days in his position, including the proposed definitions of 25 percent on Canada and Mexico, and the closure of the American Mexican border.
The Federal Reserve maintained the standard interest rate in the range of 4.25 percent to 4.50 percent in its meeting last month, and officials have since said that they are not pushing to reduce prices again until inflation becomes more confirmary to the two targets of the current level of current levels around Half a percentage point above this level.
In another mark on how the fiscal policy affects the decision -making in the central bank, the minutes said that policy makers “different” have noticed it might be appropriate to think about slowing or stopping the reduction of the Federal Reserve in its public budget in light of the federal “roof of debt”.
The current federal financing is running out after March 14, and legislators will need to act by summer to raise the debt ceiling imposed on self -risk.
Federal Reserve officials used the January meeting to start what is expected to be a period of months of the central bank policy framework, including possible reviews to focus the policy statement on the risks to the economy when the standard interest rate is near zero level.
They also made it clear that they would not change their commitment with the aim of inflation by 2 percent, or to maximize employment.
The minutes said that the review is expected to conclude by the end of next summer.
–By Howard Schneider and Ann Travel; Edit by Paul Simao
