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The Federal Reserve rises to a quarter-point Wednesday, September 30, 2009 President, Trump's request to hold off.
The Fed has repeatedly pointed out that the US economy is "strong" in the face of the recession, but the president is concerned that the economy will be affected.
"I am not happy about [the rate hike]. I would rather pay down debt, "Trump said Wednesday afternoon at a news conference after U.N. meetings." I'm worried about the fact that they seem to like rising interest rates.
It's unclear what Trump meant when it said that the Fed can take "with the money." The Fed's action Wednesday set the interest rates that banks and, ultimately, consumers and businesses, pay. The Fed's higher rates may eventually cost the government money if they make it more expensive to pay the federal debt, but the central bank did not move any money around Wednesday.
1.75 percent to 2 percent to a range of 2 percent to 2.25 percent, the highest level in a decade and a likely to be felt by Americans who have a lot of debt. loan. After the Fed Boosts the federal funds rate, interest rates on credit cards, mortgages and small business loans.
The Fed also increased its growth projections for this year, and said that it would not be easy for the economy to grow. The U.S. economy is expected to grow 3.1 percent this year, the Fed said, which would be the first time the economy hit the 3 percent mark for annual growth since 2005. Trump has repeatedly taken credit for the economy.
"Our economy is strong. Growth is running at a healthy clip, unemployment is low. The number of people working is rising steadily, and wages are up. Inflation is low and stable. Jerome H. Powell Fed Chair said during a news conference Wednesday after the release of the statement, adding a "particularly bright moment" for the U.S. economy.
When asked about the escalating trade war, Powell said that they are expressing concerns about higher prices and disruption to their supply chains. His main worry is that Trump's trade with China and other nations could result in more, not fewer, trade barriers.
"Where is this going? "That would be good," Powell said. "If this is going to be a thing of the past, it's going to be a long time, that's going to be bad for the U.S. economy and American workers."
Despite trade concerns, the Fed has a rosy period for the economy in the coming years. Trump's goal is to have an annual growth rate of 3 percent and the White House will be ready for this year. The Fed, however, anticipates growth will fall back to 2.5 percent in 2019, 2 percent in 2020 and 1.8 percent in 2021 as the benefits of the tax cut fade. But the Fed is optimistic it can steer the economy to avoid a recession.
"The odds are rising that the Fed can pull off a soft landing for the economy," said Ryan Sweet, head of monetary policy research at Moody's Analytics.
In a telling signal, the Fed said the monetary policy will "remain accommodative," an indication the Fed believes it is getting closer to the so-called neutral level of economy.
Powell downplayed the significance of the move, saying that it is a stimulus and that the current rate is not an attempt to cool the economy. Stocks retreated slightly as he spoke with the S & P 500 closing down 0.3 percent.
Trump has urged Powell, his own appointee, not to rises, but the central bank is an independent agency that shows no sign of bowing to presidential pressure. Twelve of the Fed's 16 leaders now anticipate another rate of the end of the year.
"Said Robert Frick, an economist at the Navy Federal Credit Union," said Robert Frick, an economist at the Federal Reserve.
It's an ongoing question how high the Fed will take interest rates. Fed leaders released new projections Wednesday is the third percent, a level they are likely to hit the next year. If they go beyond that, business leaders are likely to read that the Fed is concerned that the economy is overheating and inflation is picking up too much and the central bank wants to rein in it.
The Fed does not anticipate going into much more than 3.25 percent to 3.5 percent in the coming years, though they would adjust to the economy.
For now, the Fed is forecasting unemployment will fall to 3.7 percent this year and 3.5 percent next year and that inflation will remain modest at 2.1 percent this year and 2 percent next year.
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