Since 2008, the US Central Bank, the Fed reduced the key interest rate. Now, the monetary authorities react to economic development. Thus, US President, Donald Trump gets what he wants- but only a little bit.
The Headquarters of the US Central Bank in the capital city of Washington
The key rate in the U.S. drops for the first time since the financial crisis of 2008. The US Federal Reserve Bank (“Fed”) cut it by a quarter of a point on the new range of 2.0 to 2.25 percent. The monetary authorities are responding to the US President Donald Trump instigated the Trade dispute, the beats increasingly on the global economy and hence the domestic economy. As justification, the Central Bank called the “uncertainty” with a view to the development of the economy.
Trump wanted more
Trump sets the politically independent Fed has long been under pressure to reduce the interest rate – finally, just before the Fed meeting, with the demand for a massive reduction. The guardian of the currency, to Fed Chairman Jerome Powell, wants to leave the monetary policy of the policy speeches, were the rather small step, behind of this claim.
“The decision by Fed Chairman Powell and his colleagues is not a response to trump’s verbal intervention, but rather on its consequences for the USA of highly harmful trade policy,” said Economist Friedrich Heinemann from the Mannheim Institute ZEW.
Fed chief Powell (r.) – here in 2017 after his nomination – and the US President are not speaking well to each other
The Fed holds open the door for further easing. Because the guardian of the currency, stated, “to act appropriately” in order to support the growth. The rate decision was not unanimous. Two decision-makers argued that the interest rate level to be maintained. In the past year, the Fed had raised four Times the interest.
Wall Street is
The US stock markets reacted with significant losses on the interest rate cut. The Dow Jones fell 1.2 percent, the Index of technology exchange Nasdaq castle even 1.3 percent lower.
ust/AR (rtr, dpa, afp)