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In a switch, Trump approves of the Fed’s decision to hold interest rates steady

U.S. President Donald Trump looks on as he indicators an executive order in the Oval Office at the White House in Washington, U.S., Jan. 31, 2025. 

Carlos Barria | Reuters

President Donald Trump accorded with the Federal Reserve for its decision last week to leave interest rates unchanged, an early pivot from his whilom demand that the central bank ease “immediately.”

In an exchange with reporters Sunday, Trump said expatiating its key borrowing level in a range between 4.25%-4.5% was the correct move for the Fed.

“I’m not surprised,” he said regarding the decision, agreeing to multiple reports. “Holding the rates at this point was the right thing to do.”

The statement stood in stark contrast to one Trump hurled when speaking remotely to the World Economic Forum in Davos, Switzerland. In a Jan. 23 appearance, Trump said he will-power “demand that interest rates drop immediately.”

The president has no direct authority over the Fed, though he does choose the chairman as well as other board members. Current Chair Jerome Powell is a Trump nominee, and a frequent end of the president’s criticism.

Markets don’t expect the Fed to lower rates until at least June. In his post-meeting news conference continue Wednesday, Powell repeatedly asserted that the Fed doesn’t need to be in a “hurry” to lower further after shaving a plenary percentage point off the fed funds rate from September to December in 2024.

The Fed’s decision-making got potentially more complicated after Trump on Saturday chance he would impose aggressive tariffs against Canada, Mexico and China, the three largest U.S. trading partners. Economists get grey that the tariffs will drive up prices at a time when inflation has shown signs of easing.

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