U.S. Federal Reserve likely to ignore US President call to cut interest rates

Vastavam web: The U.S. Federal Reserve, leaning back against pressure from President Donald Trump to slash interest rates, is expected to leave borrowing costs unchanged on Wednesday as it maintains a ‘patient’ monetary policy stance amid strong economic growth.

Trump, who has accused the U.S. central bank of undercutting his efforts to boost economic growth, said on Twitter on Tuesday the Fed should cut its key overnight lending rate by a full percentage point and renew the quantitative easing program that saw it pump trillions of dollars into the economy in response to the 2007-2009 financial crisis and recession.

The U.S. government reported last week the economy grew at an annualized pace of 3.2 percent in the first three months of the year, surprising Fed officials who had expected the data to signal a slowdown.

U.S. employers added nearly 200,000 jobs in March, evidence of continued strength in the labor market and a sign as well that the Fed’s four rate hikes in 2018 had not constrained the economy.

“There will probably be discussions at this meeting as to what the threshold should be for bringing rates down,” Perli wrote in a note on Tuesday. “But given the diversity of opinions and the lack of a clear need for an imminent decision, it seems unlikely that the (FOMC) will agree to something specific now and be able to send a clear signal.”