Summary
- Reporter Nick Timiraos reported that even though recent inflation indicators have improved, the Fed will likely keep interest rates unchanged rather than lowering them.
- The Fed announced plans to closely evaluate the effects of Trump's tariff policy on the market and inflation expectations.
- Chief Economist Ray Farris also considered the Fed's wait-and-see approach appropriate and expressed concern about the rise in inflation expectations.
Nick Timiraos, a reporter for The Wall Street Journal (WSJ), argued that the Fed (Federal Reserve) will not cut interest rates. He is regarded as an unofficial spokesperson for the Fed.
On the 17th (local time), Timiraos said, "With recent improvements in inflation indicators, there is enough reason to expect the Fed to cut rates this week;" yet he added, "the Fed is expected to stand pat and not lower rates."
He stated that the Fed will continue to analyze Trump's tariff policy. Timiraos explained, "The Fed will assess what impact the tariff policies have had on the market," adding, "Although price increases over the past three months have been modest, there is significant concern about how the tariff policy may have disrupted inflation expectations."
He continued, "Fed officials worry that since inflation has exceeded their target (2%) for the past four years, inflation expectations could worsen further," and added, "The Fed does not want to make any mistakes."
Ray Farris, Chief Economist at Eastspring Investments, also shared similar views. He said, "It is a very sound decision for the Fed to do nothing and take a wait-and-see approach," and added, "The Fed should be uncomfortable with the rise in inflation expectations indicated in some surveys."
Son Min
sonmin@bloomingbit.ioHello I’m Son Min, a journalist at BloomingBit
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