Three Reasons the Fed Will Stand Pat on Interest Rates
There’s no compelling evidence that current monetary policy is significantly restraining economic activity.
What extreme pressure looks like.
Photographer: Chip Somodevilla/Getty Images
Despite President Donald Trump’s public efforts to cajole the Federal Reserve into lowering interest rates, monetary policy is rightly locked on hold over the near-term for three reasons.
First, the uncertainty surrounding the Trump administration’s tariff regime remains unusually high. Not only is tariff policy ever changing in terms of countries, products, rates and rationale, but also the timeline for resolution continues to be pushed back, as evidenced by the April 1 and July 9 deadlines that have come and gone. Attention is now on the Aug. 1 deadline, which is two days after the central bank next meets to set monetary policy.