The Federal Reserve is almost standing still, while President Donald Trump continues by reducing government contracts, personnel, programs and even entire agencies.
Although there is a lot in the air within the federal government, the US central banking system is an attempt to adapt to the fall-out in real time, while Trump and his 'First Buddy' Elon Musk make dramatic changes.
Civil servants of the Federal Reserve who speak of the policy of the Claim Policy is 'well positioned' to adapt to the risks arising from rapid and radical change that take shape to the federal government.
However, Post-Meeting Sentiment increasingly seems to be more careful about volatility.
President Trump has taken a very aggressive trade attitude and announced during his first month in the office intention to apply sanctions and rates to several partners around the world.
He has also been ambitious in his general economic agenda, which force agencies, departments and the central bank to remain fluent for what seems to be daily changes that influence the policy.
In a blog post on Thursday, Atalanta's Federal Reserve Bank President Raphael Bostic noted: 'In recent weeks we have not only heard enthusiasm – in particular of banks, about possible shifts in tax and regulatory policy – but also widespread fears about future trade and immigration policy . '
The Federal Reserve essentially works in Limbo, while the US central bank tries to adapt to the ambitious and sometimes chaotic, economic policy of President Donald Trump
“Injecting these cross currents even more complexity in policy -making,” he added.
In addition, entire agencies are overhauled with the help of musk and some are cut – including USAID.
Thousands of federal employees have agreed to take the buy -out to voluntarily leave their jobs for full wages up to and including September 2025 and billions of government contracts have been canceled from agencies such as the Department of Education and National Institutes of Health.
The chairman of the Federal Reserve Jerome Powell has had a meeting with governors of the Central Bank and regional presidents in the midst of all chaotic change in recent weeks.
Chatter is that although the message is about how 'well positioned' they are to be able to handle the ups and downs, there is more and more fear about the speed and level of change with expenditure and policy.
Bostic said that 'uncertainty' is an increasingly common theme with fed leaders.
The Federal Open Market Committee released on 28 and 29 January minutes from the meeting, including dozens of references to this uncertain climate.
It mentioned specifically 'increased uncertainty with regard to the scope, timing and potential economic effects of possible changes in trade, immigration, tax and regulatory policy'.
With the help of Elon Musk, Donald Trump has reduced billions to federal contracts, decimated entire agencies and dismissed thousands of government employees. His trade policy includes a whole series of sanctions and rates for global partners
“At the moment I see the risks of inflation remain over the target as an advantage crooked,” St. Louis Fed President Alberto Musalem told reporters on Thursday.
“My basic scenario is one where inflation continues to come together to 2 percent, the melody of monetary policy remains modestly restrictive, and that will take time,” he continued. “I think there is a potential for inflation to stay high and slow down the activity.”
“That is an alternative scenario, not a baseline scenario, but I am attention.”
The US central bank has aimed at inflation at 2 percent in the last four years.
Although Austan Goolsbee, president of the Federal Reserve of Chicago, is considered one of the least havel -like inflation, he remained more measured when it comes to tariff reviews.
'If you only think of rates, it depends on how many countries they will apply and the great they will be, and the more it looks like a shock with a Covid format, the more nervous you should be, “Goolsbee said during an appearance on CNBC.
