Key facts:
-
The Fed cut rates for the first time in more than four years.
-
Although it stimulates the economy, a 50-point cut may reflect economic weakness.
Republican presidential candidate Donald Trump has given his opinion on yesterday’s 0.5% interest rate cut in the United States.
“I guess it shows that the economy is in too bad a shape to cut back that much, assuming they are not just playing politics,” he said. The statement took place last night while the republican leader I was campaigning in a bar that pays homage to Bitcoin/” target=”_blank” rel=”noreferrer noopener”>bitcoin (BTC) in Manhattan, New York.
The Republican, who was president of the United States from 2017 to 2021 and is seeking to return to office this year, shared his impression of the change in monetary policy after making a payment in bitcoin at the bar, in support of the crypto-asset community.
Trump spoke about rate cuts after making a bitcoin payment. Source: Live now.
Trump called the size of the rate cuts big. “It was a big cut,” he exclaimed. That is why he thinks that represents signs of weakness in the economy.
The cut, which was the first in more than four years since the Covid-19 pandemic, brought rates down from 5.5% to 5.0%. This put an end to restrictive monetary policy, which was at its highest level in two decades, as seen below.
Interest rates in the United States. Source: Investing.
It should be noted that, although a reduction in interest rates lowers the cost of borrowing and increases liquidity, may reflect weakness of the economy. For this reason, although it seeks to boost economic activity, it fuels fears of recession generated by the slowdown in the labour market.
“The economy is either very bad or they are playing politics,” Trump insisted. “It’s one thing or the other,” he added, as the US presidential election is two months away. The Republican is contesting the presidency with Kamala Harris, the candidate of the Democrats, the party that currently leads the government.
Trump’s statements contradict those given yesterday by Jerome Powellpresident of the Federal Reserve (Fed), the Central Bank of the United States. As reported by CriptoNoticias, this He was optimistic on the economy in his speech following the rate cut announced by the agency.
Powell says US economy is strong
“Our economy is strong overall and has made significant progress toward our goals over the past two years,” Powell said. This is despite, he clarified, the fact that annual inflation has not yet come down to its 2% target and the labor market has slowed.
Despite the slowdown in the labor market, the Fed chief said that it remains strong, with data similar to those before the pandemic, while he sees the economy as “solid.” “We want to keep it that way,” he warned as inflation moves toward his 2% target. It is currently at 2.5%, as shown in the graph.
Interest rates in the United States. Source: Investing.
About the Uncertainty over whether the cuts have hidden political motivationsPowell said his moves “are never about that.” “The things we do really affect economic conditions for most people, so our job is to support the economy,” he concluded.
The markets reacted positively rate cuts, while they are expected to continue with high volatility in the face of data that provide more clarity on economic development.
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.