By james art 
The Federal Reserve held interest stable on Wednesday as it seeks to limit stubborn inflation.
The Fed’s politicians have hinted that they will be cautious about additional redundancies as long as the labor market remains solid and prices continue to rise.
The Central Bank left its interest rate between 4.25% and 4.5%. This helps to determine the cost of other short -term loans, such as car loans and credit card debt.
Although the decision to leave unchanged rates was widely expected, it creates a potential clash with President Trump, who told reporters earlier this month that he believes that “interest rates are too high.”
In a speech to the World Economic Forum last week, Trump also said he would “require” lower percentages.
There is no hurry to reduce the percentages further
The Central Bank has already reduced its reference rate by a complete percentage of September. But facing sticky inflation, politicians are in no hurry to make additional cuts. Consumer prices in December increased by 2.9% compared to a year ago – a slightly larger annual increase than the previous month.
Meanwhile, the labor market has proven to be remarkably sustainable, with employers adding more than a quarter of a million jobs last month. If the labor market was lighter, there would be more exertion on the Fed to reduce loans costs and stimulate hiring.
“I didn’t see anything in the data or forecasts that suggest that the labor market would weaken dramatically in the coming months,” said Fed Governor Chris Waller this month.
At their last meeting in December, the Fed’s politicians predicted that they would reduce interest rates to an average of only half a percent this year, which decreased from the full point reduction they had predicted three months earlier.
There was a significant disagreement with the percentage committee, with one member not designing a percentage reduction in 2025, while others predict up to four or five reductions per quarter point.
Uncertainty about Trump’s policies
While Trump wants Fed to lower interest rates, his own policies can work against this by nourishing inflation. The president threatened widespread tariffs, for example, which could lead to higher prices for consumers. Mass deportations can also limit the workforce, which makes it difficult to put prices under control.
However, Waller expects the Trump policies to be restricted, clearing the way for at least some additional redundancies to the percentage later during the year.
“Of course, we need to see what policies are adopted before we can seriously look at their effects,” Waller said in a speech this month before an international economic group. “But my message from the bottom line is that I believe more abbreviations will be appropriate.”
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