Latest news with #Fed
UPI
an hour ago
- Business
- UPI
Fed chair tells Trump policy will not be politically influenced
Federal Reserve Chair Jerome Powell had a meeting with President Donald Trump on Thursday. File Photo by Annabelle Gordon/UPI | License Photo May 30 (UPI) -- The Federal Reserve chair, Jerome Powell, has told President Donald Trump that monetary policy will not be influenced by politics. Powell and Trump had a meeting Thursday as the president has been pressuring the central bank to lower interest rates. A statement published by the Reserve following the meeting said that Powell and Trump discussed economic issues, including growth, employment and inflation. What Powell did not discuss was his expectation for monetary policy, according to the sternly worded statement, "except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook." "Chairman Powell said that he and his colleagues on the [Federal Open Market Committee] will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis," the statement said. The meeting was held at Trump's invitation, it added. White House press secretary Karoline Leavitt confirmed during a press conference Thursday that Trump saw the statement and that it was "correct." "However, the president did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries," she said. The announcement comes as the Trump administration has been seeking to influence Powell and the Fed to lower interest rates. The Fed has steadily cut the interest rate from a high of 5.5% since the summer of 2024 but has maintained a lending rate of between 4.25% and 4.5% throughout the Trump administration due to uncertainty over the president's ever-changing tariff policies. The Fed issued its most recent hold on the interest rate earlier this month over concerns about tariff-related inflation and slower economic growth. "Uncertainty about the economic outlook has increased further," the Fed said in its May 7 statement. Trump has repeatedly lashed out at the Fed and Powell. On May 2, he took to his Truth Social platform to broadcast "THE FED SHOULD LOWER ITS RATE!!!" As a reason, he pointed to a recent drop in gas prices. After the Fed maintained its interest rate hold about a week later, Trump called Powell "a FOOL, who doesn't have a clue."
Business Insider
an hour ago
- Business
- Business Insider
Goldman Sachs says new risks are breaking old market patterns. 3 portfolio moves could help avoid the fallout.
Markets have turned turbulent in recent months amid a wave of new risks that disrupt long-held relationships among stocks, bonds, and currencies. "Recent episodes of simultaneous equity, bond, and dollar declines within that period, especially since early April, have led investors to question whether cross-asset correlations have shifted," wrote Vickie Chang, a macro strategist at Goldman Sachs, on Thursday. Investor sentiment has been shaken by President Donald Trump's trade war and concerns over import tariffs, bond market dysfunction, the Federal Reserve's independence, and US debt sustainability. One of the most striking developments is the decline of US stocks, bonds, and the dollar all at once in what some are calling the "Sell America" trade. This is unusual because bonds typically serve as a cushion when stocks drop, while the dollar tends to strengthen in times of market stress. But the US Dollar Index has already dropped about 8% this year. This is challenging commonly used hedges and typical portfolio strategies, wrote Chang. Chang pointed out "newer worries" about the structural risks of Federal Reserve independence and fiscal sustainability in the US that are shaking up normal market patterns. If these concerns persist, asset correlations could stay off-kilter. Investors should consider three moves to hedge the implications of the fallout from the unusual market movements, she wrote: Position for dollar weakness: especially against the euro, the Japanese yen, and the Swiss franc, to protect against new risks and against US-specific growth worries. Consider buying gold: It's likely to protect against newer structural risks, Chang wrote. Gold is trading around $3,300 an ounce. Goldman Sachs expects the yellow metal to reach $3,700 an ounce by year-end and $4,000 an ounce by mid-2026. Watch risks from longer-dated bonds: Long-dated bonds might not reduce risk as much as they normally do. If concerns about the Fed's independence and US debt hit bond prices, these risks would hurt long-dated bonds harder than shorter-dated ones. Meanwhile, shorter-dated bond yields should protect against equity downside if the market registers clear concerns about economic growth, Chang wrote. She added that the Fed would cut interest rates if the growth outlook weakens materially.
The Herald Scotland
3 hours ago
- Politics
- The Herald Scotland
DC Mayor Bowser 'concerned' tanks will rip up streets in Army parade
The Army has since told reporters it did not expect damage to the streets, and would cover the cost of any distressed asphalt. Thick metal plates will be placed over turns on the tanks' parade route to protect the roads, according to Army officials. But Bowser said at a May 29 news conference she worried the city would have to shoulder those repairs and wait around for the Pentagon to reimburse. "I remain concerned about it," she said. "These are, for the most part, local streets, and if they're rendered in unusable, we have to make them usable." "Probably we would fix it and then go seek our money from the Fed," she said. "That gives me some concern about fronting costs and waiting for them to get back." More: Trump's getting his military parade. Here's what they look like from France to Russia The parade - which falls on President Donald Trump's 79th birthday - is a pressure point between Bowser and Trump, who clashed over Trump's push for a similarly huge military parade in his first term. Trump announced in 2018 that he had canceled his plans for the earlier parade, blaming Bowser and "local politicians" for jacking up the price tag to $21 million. "The local politicians who run Washington, D.C. (poorly) know a windfall when they see it," he tweeted. Bowser hit back that she "finally got thru to the reality star in the White House with the realities" of the cost. This time around, Bowser has held back from criticizing the upcoming parade, which will likely cost more than twice as much as the 2018 estimate - up to $45 million, according to the Army. The Army said May 21 the parade will feature 28 Abrams tanks and twice as many armored vehicles rolling down a strip of Constitution Avenue north of the National Mall. Historic fighter planes and at least 50 helicopters will fly overhead. Army parachutists, called the Golden Knights, will sail down and one will present a folded flag to Trump, who will speak from a presidential booth, USA TODAY previously reported.
Yahoo
3 hours ago
- Business
- Yahoo
Trump steps up call for US rate cuts in talks with Fed chief
US President Donald Trump on Thursday stepped up the pressure on Federal Reserve chair Jerome Powell to cut interest rates, in their first sit-down since the Republican returned to the White House in January. Trump has in recent months trained his fire on the Fed chair -- whom he first nominated to lead the independent central bank back in 2017 -- accusing him of being "too slow" to cut rates to boost economic growth. Powell and his colleagues on the Fed's rate-setting committee have insisted they will only cut rates from current levels when economic conditions allow. Trump told Powell that he was "making a mistake by not lowering interest rates," White House Press Secretary Karoline Leavitt told a press briefing after the meeting. Trump also said in the meeting that holding interest rates high was putting the United States at an "economic disadvantage" to other countries, including China, Leavitt said. Earlier Thursday, the Fed said Powell had defended US central bank independence over interest rates during the unusual meeting, which Trump had called to discuss "economic developments including for growth, employment, and inflation." "Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook," the Fed said in a statement. Powell said the Fed's rate-setting committee would make its decisions "based solely on careful, objective, and non-political analysis," it added. The meeting, the first since Trump began his second term, marks a ratcheting up of the pressure on Powell following the president's frequent social media posts criticizing him for moving too slowly to cut rates -- a process that stokes both growth and inflation. Trump and Powell met on several occasions during the president's first term in office. da/sst
New Straits Times
3 hours ago
- Business
- New Straits Times
Trump spurs questions about safety of Germany's gold in New York
FRANKFURT/BERLIN: The safety of Germany's gold reserves held overseas and in New York in particular, until recently mainly a talking point for the country's far-right party and gold bugs, is becoming a matter of public debate with Donald Trump back in the White House. The Bundesbank, Germany's central bank, has the world's second largest stock of gold at 3,352 tonnes. One-third of it is stored at the Federal Reserve Bank of New York for reasons dating back to the Cold War and the monetary system created in the wake of World War Two. Those holdings have occasionally attracted scrutiny in the past, and the right-wing Alternative for Germany (AfD) has embraced calls for a return of the country's gold back home. US President Donald Trump's confrontations with longstanding allies over trade and security, and his attacks on the Fed, have revived the issue in recent weeks and more mainstream voices have joined the debate. Germany's Taxpayers Federation sent letters this week to the Bundesbank and the Finance Ministry calling on them to repatriate the gold stored in the United States. "Trump wants to control the Fed, which would also mean controlling the German gold reserves in the US" Michael Jaeger, the Taxpayers Federation's vice-president, told Reuters. "It's our money, it should be brought back." Markus Ferber, an influential member of the European Parliament for Germany's ruling Christian Democrats, said the United States was "no longer the reliable partner it used to be." "Trump is erratic and one cannot rule out that someday he will come up with creative ideas how to treat foreign gold reserves," he told Reuters. "The Bundesbank's policy for gold reserves has to reflect the new geopolitical realities." Public broadcasters ZDF and ARD have also recently carried reports asking how safe Germany's gold is in New York. The Bundesbank said the New York Fed remained "an important storage location" for its gold. "We have no doubt that in the New York Fed we have a trustworthy, reliable partner for the storage of our gold holdings," the central bank said in response to a Reuters enquiry. The German Finance Ministry referred Reuters queries on the matter to the central bank, while stressing the Bundesbank's independence. Any hint that Germany might be considering moving gold out of New York would be politically sensitive as it could be interpreted as lack of confidence in the Federal Reserve and its independence. The European Central Bank last week stressed its trust in the Fed as a reliable partner. But Trump's frequent criticism of Fed chair Jerome Powell, whose term ends in a year, has fuelled some concerns about the Fed's future independence and its long-standing commitments to its partners. Peter Boehringer, the architect of the original decade-old gold campaign and now an AfD lawmaker, said he felt vindicated that the topic of repatriating gold reserves has now become a matter discussed by mainstream media and other lawmakers. "When I started asking about the gold, I was dismissed as a conspiracy theorist," he said. "Today, after Trump, my concerns are shared widely." Germany accumulated most of its gold during its 1950s-1960s export boom. A key advantage of storing some of it in New York during the Cold War was to keep it at a safe distance from Russia in case of an invasion. The gold also cemented a military alliance with the United States, which still has dozens of military bases around Germany, including Europe's largest. With the Soviet Union long gone, the Bundesbank brought back 300 tonnes of gold from New York between 2014 and 2017, saying it wanted to "build confidence at home". But Russia's invasion of Ukraine, and the implicit threat it represents for the rest of Europe, was likely to complicate Germany's geopolitical calculus again. For Ferber, this underscored the need for greater diversification across several, and potentially new, locations. Today, Germany's gold reserves are held at the Bundesbank headquarters in Frankfurt, in New York, and at the Bank of England in London. "For gold reserves, diversification is key. Having all eggs in too few baskets is never advisable," Ferber said, without specifying where the gold should be brought. Fritz Guentzler, a spokesperson for the Christian Democrats in the German parliament, said he had no reason to mistrust the Fed but the Bundesbank should continue "regularly inspecting the stocks" of gold. The Bundesbank said it ran regular sample tests and had inspected 13 per cent of stock in New York over the years. (
