Things are getting uncomfortable for the Federal Reserve. With an eye on the inflationofficials are inclined to keep the rates stable when they meet in Washington on Tuesday and Wednesday. But the fear of a slowdown grows, and President Donald Trump and some of his advisors insist that the Central Bank Top interest rates.
cut in that tighten, the president of the Federal Reserve, Jerome Powell, could have been comforted by Friday’s official data, which show a healthy increase of 177 thousand jobs in the payroll of April. While the labor market remains firm, the Federal Reserve can more easily justify its immobilization.
Meanwhile, the inflation indicator preferred by the FED showed that inflationary pressures continued to slowly decrease. Although Powell and company would normally welcome this cooling, the increase in American import tariffs could negatively affect the progress achieved in inflation.
In fact, Uncertainty is now the dominant factor for the main central banks of the world. The White House looks for agreements in tariff matters that could change the panorama, a nightmare for anyone who tried to forecast future economic conditions.
According to Bloomberg Economics, Powell is expected to oppose market prices and give a renewed priority to price stability.
Officials such as the president of the FED of Richmond, Thomas Barkin, and the governor of the FED, Adriana Kugler, have expressed concern about the possible relaxation of inflation expectations. If we add to this the solid data of the payrolls of April, there is little pressure for a short -term cut.
The European Central Bank has continued to cut interest rates in anticipation of continuous disinflation and lower growth caused by US tariffs. However, eurozone inflation remained unexpectedly stable according to a report published on Friday, while an underlying indicator shot.
Another example of the confusion surrounding the commercial war: in April, the Bank of Canada abandoned its usual practice of publishing a base forecast. Instead, he issued two potential scenarios – and very different – that depend on the result of the Canadian tariff dispute with the United States.
The US economic data calendar is light next week. On Monday, the Supply Management Institute (ISM) publishes its April services index. Economists will then focus on unemployment applications data to detect any indication that layoffs are being accentuated.
Initial unemployment requests in the week that ended on April 26 reached their highest level since February, mainly due to the increase in applications in New York due to the spring break.
