The American Federal Reserve chairman Jerome Powell speaks at a press conference after the meeting of the Monetary Policy Committee in Washington, DC, on December 18, 2024.
Andrew Caballero-Reynolds | AFP | Getty images
This week, the Federal Reserve is gathering for the first time in the second presidential term of Donald Trump, who has already indicated that he wants lower interest rates.
If almost every indication is accurate so far, it is unlikely that the new leader of the free world will get what he wants, at least not yet, because officials weigh several variables that can make the policy difficult this year and probably the Fed on hold can keep.
“They will probably go behind,” said American bank -economist Beth Ann Bovino. “Nobody knows what to expect from the White House. The policy movements are still very unclear, but we do know that some of those proposals that have been discussed are a bit inflationary about, and I think that will remain the Fed Under control. “
Market prices indeed indicate almost 100%certainty that the interest rate federal open market committee will hold the policy percentage of the central bank in a target range of 4.25%-4.5%, according to CME group facts.
In fact, traders see the FED on hold until June, a period in which Trump’s plans for rates, regulations and immigration will probably come into the picture more clearly. Trump said on Thursday that he “will demand that the interest rates will fall immediately”, although he has no authority about the decisions of the FED.
The FED has reduced the rates for each of the last three meetings, which reduces the loan percentage by a full percentage point in the short term. The rate decision will be released on Wednesday at 2 p.m.
Despite the pressure of the White House, central bankers have to hold and take a break of policy changes, said former Dallas Fed President Robert Kaplan.
“It is the right call to stay stable. Inflation progression may not have stalled, but it will be sideways, and you have four or five major structural changes in progress and you will unfold,” said Kaplan, now a Goldman Sachs -Executive , Monday in a CNBC interview. “The right thing to do is not doing anything in this meeting.”

Kaplan mentioned three changes that can be disinflationary: cutbacks on the government, regulatory assessment of the newly beaten advice panel that the Ministry of Government has called efficiency and Trump’s “Drill Baby Boor” approach of energy, as well as expected efforts to architecture the sector make more efficient.
Kaplan sees the potential for rates to increase prices higher, while massive deportations – who started seriously – can increase labor costs.
“What Trump clearly wants them to do is speed up their analysis, accelerate their assessment of this new policy and act rather, even what they are comfortable,” said Kaplan. “The task of the people of the Fed, in this case, is to do their analysis and not to act until you have faith.”
This meeting will not contain an update of the Fed’s quarterly economic projections, including the “point plot” of the estimates of individual members for which the interest rates go. During the December meeting, the participants reduced their expected number of tariff reductions to two of four earlier, assuming that each reduction in steps of a quarter -time percentage is made.
Investors will be left to pure the post-meeting statement, which is expected to be not changed much and then turns to chairman Jerome’s news conference at 2.30 p.m.
Powell had a controversial relationship with Trump during the first round of the president in the Oval Office, from 2017 to 2021, and he will probably be asked to respond to the president’s requirement for lower rates.
“The FED must follow its legislative mandate,” former President of Kansas City Fed Esther George told CNBC in an interview Friday. “The congress has told us that it is to bring prices to a low and stable level. In the long term, this institution must think about those objectives instead of being influenced by external comments and political pressure on its way, such as Before it is for his entire existence. “