Fed meets for the first time since Trump’s mandate began. What to wait

The Federal Reserve meets this week for the first time in the second presidential mandate of Donald Trump, who has already pointed out that he wants lower interest rates.

If virtually all indications are precise, it is unlikely that the new leader of the free world obtains what he wants, at least not yet, since officials weigh multiple variables that could hinder the formulation of policies this year and it is likely that it is likely Keep feeding on hold.

“They will probably be in the background,” said American banking economist Beth Ann Bovino. “Nobody knows what to expect from the White House. The movements of politics are not yet clear, but we do know that several of those proposals that have been talked about in the White House are a bit inflationary, and I think that will remain in monitoring the check “.

In fact, the market price points to a certainty close to 100%that the Federal Open Mercado Committee for Feas Establishment will maintain the policy rate of the Central Bank in an objective range of 4.25%-4.5%, according to CME Group data.

In fact, merchants see the Fed on hold until June, a period during which Trump plans For rates, regulations and immigration are likely to appear more clearly in view. Trump said Thursday that he will “demand that interest rates fall immediately“Although it has no authority on Fed decisions.

The Fed has reduced rates in each of its last three meetings, reducing its short -term indebtedness rate at a complete percentage point. The rate decision will be published on Wednesday at 2 pm et.

Despite the pressure of the White House, the central bankers must stand firm and take a break from the changes in the policies, said the former president of the Fed of Dallas, Robert Kaplan.

“It is the correct call to stay stable. The progress of inflation may not stance, but it is on the side, and you have four or five great structural changes in progress and the point of developing,” said Kaplan, now Goldman Sachs executive, Monday in a CNBC interview. “The right thing is to do anything at this meeting.”

Kaplan cited three changes that could be disinflators: government expenses cuts, regulatory review of the newly coined advisory panel called the Government’s efficiency department, and the “baby exercise of baby exercise” of Trump, as well as the expected efforts to make That the architecture of the sector is more efficient.

On the inflation side, Kaplan sees The potential of tariffs to increase the highest prices, while mass deportations – That seriously started this week – could increase labor costs.

“What Trump would obviously love to do is accelerate their analysis, accelerate their evaluation of these new policies and act before, even what they feel comfortable,” Kaplan said. “The work of the people of the Fed, in this case, is to do their analysis and not act until you have confidence.”

This meeting will not present an update of the quarterly economic projections of the FED, including the “plot of points” of the estimates of the individual members on where the interest rates are directed. To the December meetingThe participants reduced their expected number of feat cuts to two of four previously, assuming that each cut is made in increases of a percentage point.

Investors will be agreed through the statement after the meeting, which is expected to change little, then turn to the chair Jerome Powell ‘S Press Conference at 2:30 PM et.

Powell had a controversial relationship with Trump during the president’s first round in the Oval office, from 2017 to 2021, and will probably be asked to respond to the demand of the president of lower rates.

“The Fed must follow its legislative mandate,” said former Fed president of the city of Kansas, Esther George, CNBC in an interview on Friday. “Congress has told us that it is to bring prices to a low and stable level. In the long run, this institution has to think about those objectives instead of being influenced by external comments and political pressure that is presented, as it has done for all its existence. “