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The US Federal Reserve began the second day of its key policy meeting on Wednesday, with markets widely expecting the Central Bank to keep interest rates unchanged, despite President Donald Trump’s repeated calls for further cuts.
The rate-setting Federal Open Market Committee (FOMC) meeting started at 9 a.m. Eastern Time (1400 GMT), a spokesperson confirmed. The Federal Reserve has cut rates at each of its last three meetings, bringing them to a range of 3.50–3.75 per cent, amid concerns over a cooling jobs market.
However, solid GDP growth, relatively low unemployment and persistent inflation have led officials to adopt a wait-and-see approach. Analysts warn that this cautious stance could place the Fed at odds with Trump, who has aggressively lobbied for large reductions in borrowing costs.
Since returning to the White House, Trump has escalated pressure on the Fed, seeking to oust Governor Lisa Cook over mortgage fraud allegations and launching an investigation into Chairman Jerome Powell regarding the bank’s headquarters renovation. Powell recently criticised these moves, stating that monetary policy should not be “directed by political pressure or intimidation.”
Financial markets largely expect rates to remain steady until the June FOMC meeting, according to CME FedWatch. Attention is also turning to how Trump’s nominee to succeed Powell, whose term ends in May, will influence future policy.
