Powell, Jerome H

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    What to Watch at the Federal Reserve’s First Meeting of 2025

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    The U.S. central bank is expected to hold interest rates steady as officials weigh a solid economy and rising inflation risks.The Federal Reserve is set to stand pat at its first gathering of 2025, pressing pause on interest rate cuts as policymakers take stock of how the world’s largest economy is faring.After lowering interest rates by a full percentage point last year — starting with a larger-than-usual half-point cut in September — central bank officials are at a turning point.A strong labor market has afforded the Fed room to move more slowly on reducing rates as it seeks to finish off its fight against high inflation. Officials see the economy as being in a “good place” and their policy settings as appropriate for an environment with receding recession risks but nagging concerns about inflation.Stoking fears are a spate of economic policies in the pipeline from President Trump, which include sweeping tariffs, mass deportations, widespread deregulatory efforts and lower taxes. The economic impact of those policies is unclear, but policymakers and economists appear most wary about the possibility of fresh price pressures at a time when progress on taming inflation has been bumpy.The Fed will release its January policy statement at 2 p.m. in Washington, and Jerome H. Powell, the Fed chair, will hold a news conference right after.Here is what to watch for on Wednesday.A prudent pauseA pause on interest rate cuts from the Fed has been an a highly expected outcome ever since Mr. Powell stressed this fall that the central bank was not “in a hurry” to bring them down.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Where Does a ‘Remarkable’ U.S. Economy Go From Here?

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    America’s economy is far outstripping its peers, but there are serious risks, including from the president-elect.The U.S. economy is pulling ahead of its global peers. Inflation is moderating, and the Federal Reserve is cutting interest rates.Add in a decrease in unlawful southern border crossings and revved-up domestic production in several critical industries and they amount to a rough list of Donald J. Trump’s campaign promises.It’s a list of economic wins that Mr. Trump is inheriting in large part because of policies that the Federal Reserve and Biden administration have pursued in recent years.The economy is doing better than most economists predicted a few years ago. Forecasters widely warned that the Fed would seriously harm the economy as it tried to control runaway inflation by sharply raising interest rates in 2022 and 2023. Instead, price increases have come down substantially without a broader implosion. The unemployment rate is low. Consumers are spending.“The U.S. economy has just been remarkable,” Jerome H. Powell, the Fed chair, said during a news conference on Wednesday, after the Fed cut rates for a third time this year.But a variety of risks — some sheer happenstance, some floated by Mr. Trump — could interfere with that rosy outcome just as the newly re-elected president takes office.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Jerome Powell and the Fed Head for Another Collision with Trump

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    Rates may not come down as much or as quickly as had been expected, just as Trump — a self-declared “low-rate guy” — returns to the White House.Inside the halls of the Federal Reserve’s headquarters overlooking Constitution Avenue in Washington D.C., casual mentions of the incoming Trump administration are cautious and infrequent. That’s by design.Donald J. Trump had a fraught relationship with the politically independent Fed during his first term. The president wanted central bankers to lower interest rates more aggressively and faster than they thought was economically appropriate. When officials refused to comply, he blasted them as “boneheads” and an “enemy.” He flirted with trying to fire Jerome H. Powell, the Fed chair. He tried (and failed) to appoint loyalists to central bank leadership roles.As the Fed enters a new Trump era with interest rates higher than they were at any point in his first term, tensions seem poised to escalate once again — and America’s central bank is on high alert.Fed analysts try to avoid casually discussing tariffs in email or Microsoft Teams meetings, wary that the information could become public and make the Fed look anti-Trump, according to one staff economist who spoke on the condition of anonymity to discuss the sensitive matter. Hallway chatter has taken a negative tone but is often studiously generic and apolitical, according to people familiar with the mood inside the building who also requested anonymity. And while Fed officials and economists have had to begin to consider what Mr. Trump’s promised policies might do to growth and inflation, they have avoided publicly speculating.Central bankers are, in effect, keeping their heads down to stay out of the limelight. But try as they might, they appear destined for another crash course with Mr. Trump.The president-elect promised “interest rates cuts the likes of which you have never seen before” while campaigning. Fed officials have been cutting rates since September and are on course to lower them further as inflation cools, but they are unlikely to reduce them as much as Mr. Trump is hoping.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fed Minutes Show Options Are Open on Interest Rate Cuts

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    Minutes from a Nov. 6-7 meeting showed that Federal Reserve policymakers favored lowering rates “gradually.”Minutes from the Federal Reserve’s November meeting offered little signal about whether officials would cut interest rates at their next gathering, though they suggested that policymakers did expect to continue to lower borrowing costs “gradually” over time.The account of the central bank’s Nov. 6-7 meeting, released on Tuesday, showed that Fed officials still planned to cut interest rates further. But with the job market holding up better than expected and the economy growing at a solid clip, they are in no rush to slash them rapidly.Fed officials thought it “would likely be appropriate to move gradually toward a more neutral stance of policy over time,” the minutes showed.At the moment, central bankers think that their policy rate — which is set to a range of 4.5 percent to 4.75 percent — is “restrictive,” which means it is high enough to weigh on growth.That’s by design. Policymakers lifted rates to high levels in 2022 and 2023 to make borrowing more expensive, hoping to cool the economy and wrestle rapid inflation under control. But over the past year, inflation has been slowing toward the Fed’s 2 percent goal, and the unemployment rate had begun to nudge higher.Given that, officials began to cut rates in September, then made a second rate cut in November. The goal was to ease off the economic brakes a little, allowing the economy to slow gently without risking a painful crash. When Fed officials last released economic forecasts, in September, policymakers expected to make one final quarter-point rate cut in 2024.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Trump’s Win Means for the Federal Reserve and Jerome Powell

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    Donald J. Trump spent his first presidency on a collision course with America’s central bank. Will it intensify?Donald J. Trump spent his first presidency attacking the Federal Reserve, pushing policymakers to cut interest rates and calling Fed officials names that ranged from “boneheads” to “enemy.”That rhetoric is likely to make a return to the White House with Mr. Trump. The Republican has been promising that interest rates will come down on his watch — even though rates are set by the politically independent Fed and the president has no direct control over them.The question looming over markets and the Fed itself is whether Mr. Trump will do more than just talk this time as he tries to get his way. The Fed is in the process of cutting rates, but it is unclear whether it will do so fast enough to please Mr. Trump.Congress granted the Fed independence from the White House so that central bankers would have the freedom to make policy decisions that brought near-term pain but long-term benefits. Higher rates are unpopular with consumers and with incumbent politicians, for instance, though they can leave the economy on a more sustainable path over time.But some in Wall Street and in political circles worry that the Fed’s insulation from politics could come under pressure in the years ahead. Here’s what that might look like.Trump Could Shake Up Fed PersonnelMr. Trump first elevated Jerome H. Powell, the Fed chair, to his current role in early 2018. He then quickly soured on Mr. Powell, who resisted his calls to sharply lower interest rates.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Here’s What to Watch as the Fed Meets Thursday

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    Federal Reserve officials are widely expected to cut rates by a quarter point, as uncertainty about a second Trump presidency looms large.Federal Reserve officials are widely expected to cut interest rates on Thursday. The bigger focus will center on what comes next for America’s central bank.Fed officials are cutting interest rates in response to months of slowing inflation. Policymakers lowered borrowing costs for the first time in four years in September, reducing them by half a percentage point. Officials projected two more smaller rate cuts in 2024 and a string of further reductions in 2025.But a combination of stronger recent economic data and President-elect Donald J. Trump’s return to the White House could muddle that outlook.The job market, which seemed wobbly when the Fed last met in September, has since stabilized. Consumer spending has remained strong, and overall growth looks solid. Those developments suggest that rates might not need to come down as much or as quickly in order to keep the economy steady.And if Mr. Trump follows through on his campaign promises, they could make it more difficult for the Fed to continue lowering interest rates as quickly. He has pledged a combination of tax cuts, tariffs and deportations that economists and Wall Street investors think could fuel inflation.“The main takeaway is that his election injects a higher degree of uncertainty into the outlook both for growth and for inflation,” said Blerina Uruci, chief U.S. economist at T. Rowe Price.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Brags About His Math Skills and Economic Plans. Experts Say Both Are Shaky.

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    In a combative interview, the former president hinted at even higher tariffs as an economic magic bullet.Former President Donald J. Trump has been offering up new tax cuts to nearly every group of voters that he meets in recent weeks, shaking the nerves of budget watchers and fiscal hawks who fear his expensive economic promises will explode the nation’s already bulging national debt.But on Tuesday, Mr. Trump made clear that he was unfazed by such concerns and offered a one-word solution: growth. Despite the doubts of economists from across the political spectrum, Mr. Trump said that he would just juice the economy by the force of his will and scoffed at suggestions that his pledges to abolish taxes on overtime, tips and Social Security benefits could cost as much as $15 trillion.“I was always very good at mathematics,” Mr. Trump told John Micklethwait, the editor in chief of Bloomberg News, in an interview at the Economic Club of Chicago.Faced with repeated questioning about how he could possibly grow the economy enough to pay for those tax cuts, Mr. Trump dismissed criticism of his ideas as misguided. He professed his love of tariffs and insisted that surging output would cover the cost of his plans.“We’re all about growth,” Mr. Trump said, adding that his mix of tax cuts and tariffs would force companies to invest in manufacturing in the United States.The national debt is approaching $36 trillion. The Committee for a Responsible Federal Budget projected last week that Mr. Trump’s economic agenda could cost as much as $15 trillion over a decade. Economists from the Peterson Institute for International Economics, a nonpartisan think tank, estimated last month that if Mr. Trump’s plans were enacted, the gross domestic product could be 9.7 percent lower than current forecasts, shrinking output and dampening consumer demand.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More