\n<\/p>\n
The US Federal Reserve left interest rates unchanged after its latest board meeting, defying once again Donald Trump\u2019s call for a cut as the central bank prepares for a leadership shake-up next month.<\/p>\n
On Wednesday, Fed officials continued to cite elevated inflation, slow job growth and uncertainty in the Middle East as reasons why rates were left untouched.<\/p>\n
\u201cJobs gains have remained low, on average, and the unemployment rate has been little changed in recent months. Inflation is elevated, in part reflecting the recent increase in global energy prices,\u201d the board said in a statement.<\/p>\n
While only one of the board\u2019s 12 voting members voted against leaving the rate unchanged, the Fed board also signaled growing dissent within its ranks: three members supported maintaining the current rate, but did not agree with the Fed suggesting it will lower rates later this year.<\/p>\n
Brent crude oil, the global benchmark, briefly hit $119 a barrel on Wednesday, a monthly high and a 7% jump over the course of a day as uncertainty around the war in Iran looms.<\/p>\n
The Fed\u2019s meeting ended hours after the US Senate banking committee confirmed the former Fed governor Kevin Warsh, clearing a procedural path for the whole Senate to confirm him as new chair of the central bank.<\/p>\n
Warsh is expected to be more amenable to Trump\u2019s calls for a rate cut than the current chair, Jerome Powell, who has been the target of hostile attacks toward himself and the central bank over its rates agenda. But with just one vote of 12 on the Fed\u2019s rate-setting board, Warsh can\u2019t deliver cuts without the support of his fellow board members.<\/p>\n
Questions remain over whether Powell will stay on the Fed board after his term ends on 15 May. Powell can stay on the board until his term as a Fed governor is up in 2028. Though it would be unprecedented in modern history for a Fed chair to stay on, Powell has suggested it is still a possibility.<\/p>\n
By setting interest rates, or the price of borrowing money, the Fed has enormous power over consumer prices and unemployment. Economists largely agree that an independent central bank is essential for a stable economy.<\/p>\n
Higher interest rates have helped bring inflation down from a generational high of 9.1% with minimal impact to the labor market. But the central bank\u2019s influence has been overshadowed by policies carried out by the White House that have had enormous influence on the economy, from Trump\u2019s tariffs and immigration crackdown to higher energy prices amid the war with Iran.<\/p>\n
In response to Trump\u2019s policies, Fed officials have taken a measured wait-and-see: after reaching a two-decade high of 5.25% to 5.5% in 2023, rates are now down to 3.5% to 3.75%.<\/p>\n
But Trump and his economic advisers have been impatient for rate cuts, arguing that Fed officials are withholding power to stimulate economic growth.<\/p>\n
Trump says that the Fed should be lowering interest rates more, which would stimulate the economy at the risk of raising prices. The latest reading on US inflation showed prices went up 3.3% in March \u2013 1.3% higher than the Fed\u2019s target inflation rate of 2%. Meanwhile, the unemployment rate has remained stabilized at 4.3% after rising slightly last year.<\/p>\n
Trump\u2019s fury culminated in a justice department investigation into building renovations at the Fed that went over budget. The president has suggested that Powell\u2019s role in the renovations as chair may have been corrupt.<\/p>\n
In a rare rebuke of the White House, Powell in January called the investigation a \u201cpretext\u201d after the Fed resisted Trump\u2019s attempt to influence interest rates.<\/p>\n
The investigation cast a shadow over Warsh\u2019s nomination after the Republican senator Thom Tillis said he would block Warsh\u2019s nomination until the White House dropped Powell\u2019s investigation.<\/p>\n
While the justice department dropped its investigation into Powell last week, satisfying Tillis\u2019s demand, the White House suggested that other investigations into the renovations remain ongoing.<\/p>\n
\u201cI have directed my office to close our investigation as the [inspector general\u2019s office] undertakes this inquiry,\u201d the US attorney for the District of Columbia, Jeanine Pirro, wrote in a statement. \u201cNote well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.\u201d<\/p>\n
Last month, Powell said that he would stay on the Fed\u2019s board \u201cuntil the investigation is well and truly over with transparency and finality\u201d. Currently, it is unclear whether the outstanding inspector general\u2019s report will affect his decision, though Powell is expected to field questions on the matter at a press conference on Wednesday.<\/p>\n","protected":false},"excerpt":{"rendered":"
The US Federal Reserve left interest rates unchanged after its latest board meeting, defying once again Donald Trump\u2019s call for a cut as the central bank prepares for a leadership shake-up next month. On Wednesday, Fed officials continued to cite elevated inflation, slow job growth and uncertainty in the Middle East as reasons why rates<\/p>\n","protected":false},"author":1,"featured_media":48894,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[680,562,8408,4437,319,519,2013,520,517,71,2331],"class_list":{"0":"post-48893","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-calls","9":"tag-cuts","10":"tag-defiance","11":"tag-fed","12":"tag-federal","13":"tag-interest","14":"tag-leaves","15":"tag-rates","16":"tag-reserve","17":"tag-trumps","18":"tag-unchanged"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/48893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48893"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/48893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/48894"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}