The promise of President Trump to suppress inflation became more complex after January Consumer Price Index (CPI) He came in hot than expected last week.
The report withdrew markets, exerting pressure on the shares, while the bond yields increased because investors reduced the expectations to reduce interest rates, while some even revived the possibility of increasing.
But it has nothing to do with hiking – only a delayed reduction in the rates could put President Trump on a “collision course” with the Federal Reserve, warned Economist Nouriel Roubini.
“They will even put them and just keep them [Powell] On the trump collision, because Trump now wants to reduce rates, “Roubini said.” We already see these tensions and they will accumulate. “
Immediately in front of the inflation released, Trump called on the Fed to lower the footsteps, publishing a social truth that reduces interest rates go “hand in hand” with his tariff daily order.
His invitation to lower rates comes despite the repeated return of the president of the Federal Reserve of Jerome Powell, who once again hinted at not in a hurry to reduce interest rates. Speaking before the Congress on Wednesday, Powell told MPs homes: “I would say we are close, but not there for inflation … For now, we want to be a restrictive policy.”
And while Powell warned this week that “it would be recklessly speculated” about the economic outburst of tariffs, Wall Street remains skeptical of Trump’s daily politics region. Roubini doubled his warning that the proposed policies of Trump’s administration – including tariffs – risk by adding current inflation pressures, while Moody’s Analytics is the main economist Mark Zandi warned Consumers will “transfer the burden”.
“Tariffs, protectionism, economic war with our friends and allies, and also with China, are inflationary and reduced growth,” Roubini explained.
Zandi also reiterated the concern that Trump’s tariffs would add to influenced pressures, telling me that Trump’s tariff proposals would stimulate more inflation, increase interest rates and reduce economic growth – factors that would further “complicate” the upcoming political decisions of the federal reserves.
Zandi sees that risk elevated after January of the CPI prints, which showed that “disinflation was nearing end” because prices increased in numerous sectors, including energy, food, used cars and trucks and motor vehicle insurance.
“A widely founded nature price increases … something is to worry about the tariff,” Zandi said in the morning short Yahoo Finance. “The disinflation in which we enjoyed it is now completed and unfortunately we did not go back to the goal of the federal reserves, so it is disturbing.”
