THE Federal Reserve reduction 25 basis points interest rates in the United States, which represents the second consecutive decline, and leaves these rates at 4.75%. A decision which, although expected, remains no less significant, and which aims to consolidate the bases of the American economy at a time when, after having defeated the ghost of inflationit is feared that debt Americans in credit cards and the bad situation of regional bank of the country can cause some type of shock economic.
Of his Federal Reserve -FED- underlines the weakness of the employment data from last October which, even if they do not constitute an alarm signal, nevertheless constitute a source of concern for the organization chaired by Jerome Powell.
We must remember that last week we knew the data on job creation in USAwho fell to 12,000 jobs net, a far cry from the more than 200,000 that had been generated the previous month. From the government of Joe Biden And Kamala Harris They attribute this drop in job creation to the arrival of different hurricanes to tourist areas and different sectoral strikes.
own Bidenin the usual declaration of White HouseI’m talking about expecting “a resumption of job growth in November.” The reality, according to the Federal Reserve statement we just learned, is that Jerome Powell and their people fear that a floor has been hit in the jobin the same way that they fear that interest ratewhich have increased at the fastest rate in history, are harming citizens’ ability to pay.
In any case, the the strength of the labor market This has been one of the achievements that Biden has most highlighted during his almost four years in office during which he boasts of having created “16 million jobs“.
Before the end of the year, members of the Federal Reserve Open Committee -those who voted on reducing, maintaining or increasing interest rates- plan to hold another meeting on those days December 17 and 18.
The key will be in this meeting. Beyond today’s words Jerome Powellthe market is looking to December to see if rates will fall further. A further decline before the end of the year could be a warning that, in reality, the real economy – beyond global GDP growth – is in worse shape than expected and we could enter a recessionary environment.
In any case, what is ruled out both by the market and by the consensus of analysts consulted by OKDIARiO did at the December meeting, interest rate at 4.5%and will decrease further in January, to give a greater flexibility At credit In USA.
First meeting after Trump’s victory
Today is the first time that Jerome Powell He faces the microphones of the press after the victory of Republican candidate Donald Trump, and they will meet again as president of the country and top leader of the Federal Reserve.
They will do so despite Trump’s criticism of Powell’s leadership over the past two years, which has criticized “the government’s lack of independence.” FED. during the mandate of Joe Biden“. The one who will be president of the United States once again considers that Powell helped “the Biden administration to get into debt”, and that he paid the price for “disastrous management of the economy”. banking resources“.
own Powell He was appointed president of the FED by Donald Trump during his previous term, which did not prevent the tycoon from saying on several occasions that “never helped him in his mandate“, but that he had bowed to “democratic interests”. In any case, Trump’s entourage himself suggested this afternoon that he would “keep Powell until the end of his mandate” , in 2026.
Powell took the opportunity to send a message about his independence and that of the organization he leads, even though he is aware that asset will decide on his continuation in his functions, at the latest, 2026.
