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US President Donald Trump said Federal Reserve Chairman Jerome Powell "failed to cut interest rates by a quarter point on Wednesday, saying the market wanted a signal for the launch of a "prolonged cycle of interest rate cuts".
"What the market wanted to hear (Jerome) Powell and the Federal Reserve, it's the beginning of a long and aggressive cycle of interest rate cuts under the conditions followed by China," he said. European Union and other countries, "Trump said in a tweet just hours after the release of the latest statement from the US central bank. Worldwide".
"As usual, Powell has failed, but at least it puts an end to the quantitative focus that should not have started," Trump said.
After 10 years of steady growth, the US Federal Reserve has reduced its primary credit interest for the first time since 2008, following persistent criticism from Donald Trump and accusations that the US economy was not sufficiently stimulated.
The US Federal Reserve cut its interest rate by 2-2.25% on Wednesday, citing "uncertainties" about the global economy and "lingering weakness" in inflation.
Tuesday's demand was a "sharp" reduction in interest rates.
The Monetary Committee left the door open for a new initiative, saying it would act "appropriately to support growth".
The reserve raised interest rates four times (quarterly) last year, but now considers that weak global growth and low inflation require a more flexible monetary policy.
Despite this change in monetary direction, the description of economic activity by the Monetary Committee has not changed much from its last meeting six weeks ago.
Employment growth remains "solid" and investment growth is "low" and inflation remains "below the 2% target".
The Fed also decided to stop, two months earlier than planned, to reduce its balance sheet and abandon its Treasury bonds.
Lower interest rates on government bonds would imply a slight rise in interest rates, which would provoke anger from Trump, who is complaining about the high cost of loans.
The Federal Reserve's budget is expected to rise to around $ 3.8 trillion from $ 4.5 trillion by the end of 2017, while it was at its highest level when the reserve decided to Aggressively buy bonds to stimulate economic recovery.
Pressure
In defending its independence, the Fed is headed in the direction required by Trump.
Trump, seeking a second term, wants interest rates that encourage consumers, reduce debt and boost the Dow Jones index on Wall Street.
"The European Union and China will again reduce their interest rates and inject money into their systems, which will facilitate the sale of their products," complained Monday. Trump. "In the meantime, with very low inflation, our reserves are doing nothing and will probably do the same thing without comparison." He said.
The Federal Reserve's decision was not unanimous in the Monetary Committee. Two members preferred to keep interest rates unchanged.
Many economists worry that this will lead to an erroneous reduction in the economy, which could lead to a financial bubble, especially with regard to corporate borrowing or inflation.
This is the first time since Jerome Boyle badumed the presidency of this institution in early 2018, when the Monetary Committee sees this split.
While inflation has stabilized at 1.4%, the US economy is robust at 2.1% in the second quarter of 2019 and unemployment is at its lowest level in half a year. century (3.7%).
After eleven years of financial crisis, the US Federal Reserve has joined the global central banks in its flexible policy.
The European Central Bank, which maintained its zero interest rate last week, launched a series of treatments in the event of a crisis, ranging from cuts or multiple rate cuts to a resumption of debt purchases, creating a dark picture of the economic outlook for the euro zone.
The Bank of Japan still has a very flexible monetary policy.
The main Wall Street indexes remained unchanged after a slight decline in the Fed's announcement of a rate cut.
On the other hand, the exchange rate of the dollar rose by 0.45% against the euro to reach 1.106 dollars per euro. It was up 0.2% ahead of the release.
AFP + Reuters
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