The president of the Federal Reserve, Jerome Powellhas opened the door timidly to a type cut, although it has warned that the high uncertainty hinders the work of those responsible for monetary policy.
In his expected speech in the annual symposium of the Fed in Jackson Hole (Wyoming) The president of the Central Bank has indicated that «the risk balance seems to be changing» between the two objectives of the FED (full employment and stable prices), due to «radical changes» in fiscal, commercial and immigration policies.
Although he has pointed out that the labor market remains in good condition and the economy has demonstrated resilience, has recognized that the downward risks are increasing. At the same time, tariffs generate risks that inflation can rise again, a stagflation scenario that the Fed should avoid.
In this environment, he has called for «proceed cautiously While we consider changes in our monetary policy position. «» However, with policy in restrictive territory, the reference perspectives and the changing balance of risks They could justify an adjustment of our monetary policy position”He recognized.
After these words, market operators The probability that at the September meeting produces a 25 percentage point interest rate of 25 points are raised above 90%according to the Fedwatch tool of CME Group. Before the speech, the percentage moved around 70%.
The Federal Reserve has maintained its reference interest rate in a range between 4.25% and 4.5% since December.
Powell’s speech comes at a time when the US president Donald Trump is actively looking for his successor, despite the fact that his mandate at the head of the Fed will not expire until May of next year.
Trump has maintained an almost constant position against Powell since his landing in the White House, pressing to lower interest rates and even arriving at the insult. However, in recent days the president’s attacks have gone beyond the mere monetary policy.
At the beginning of this summer, the government lashed out at the Federal Reserve for an important reconstruction project at its Washington headquarters, this coincided with a period in which Trump considered the possibility of dismissing Powell, although later he gave up. This week, the Government focused its attention on the governor of the Federal Reserve, Lisa Cook, accusing her of mortgage fraud in relation to two loans with federal support she obtained.