Why the Fed is keeping rates low as Trump is pushing for a massive tax cut
When the Federal Reserve announced it would keep rates low for a third year in a row on Tuesday, it seemed like a win for the Trump administration.
It’s been a slow-burning year of tax cuts and economic growth for President Donald Trump.
But the Fed’s decision to keep rates on hold after four years of the George W. Bush-era rate hikes is an important signal that the Fed will keep raising rates.
The Fed’s announcement comes after Trump pushed for a major tax cut this year, as well as an increase in the minimum wage, to help ease the impact of the Great Recession.
The Federal Reserve’s decision also comes as the Trump Administration continues to pursue a controversial plan to boost military spending.
The administration is proposing $54 billion in increases in defense spending over the next 10 years, as the Pentagon prepares to enter a decade of war.
“The Fed is still keeping its rates on the rise,” said Andrew Harrer, senior fellow at the Economic Policy Institute.
“It’s a sign that the President is making good on his campaign promise to boost the economy.”
The U.S. economy has been on the mend since Trump took office in January, when the unemployment rate dropped to 6.7 percent from 6.9 percent.
But it’s only gotten worse since then, with a 7.9% unemployment rate and a jobless rate that’s more than twice as high as it was in March of 2016.
This week, the U.K. government reported that its jobless claims had fallen to the lowest level since August 2016, a sign of how badly the economy is doing.
dollar rose against the euro on Tuesday in response to the Fed announcement.
The dollar is trading at $1.1847, down $1 from its level on Tuesday.
The euro has also fallen against the dollar since Tuesday.
“This is a signal that we’re still not seeing a full recovery in the U, U. S. economy,” said Jason Furman, a former Fed chairman who now serves as the director of the New America Foundation.
“If you’re looking at a U. K. jobless claim that’s at the lowest point since the Great Depression, that’s a pretty poor showing.”
Furman also noted that the U-K.
has been seeing a decline in the number of people seeking help in the last few weeks.
“I think it’s important to remember that we have been at this for about a year now, and we have not seen any sustained improvement in our economy,” Furman said.
The economy added 209,000 jobs in May, the first time it has posted that many since August.
It has been working to reduce the unemployment gap between those who are actively seeking work and those who aren’t.
The unemployment rate was 6.6 percent in May.
Inflation has also been rising steadily over the last year, with the unemployment number falling from 7.3 percent in March to 6 percent in June.
Economists expect the unemployment figure to rise as the economy adds jobs.