Federal Reserve Leaves Interest Rates Unchanged as Trump Demands Cuts

TIME

The Federal Reserve left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut.

Transcript

00:00Mr. President, you said that higher interest rates are making it harder for veterans to refinance.

00:05There's a stronger-than-expected GDP report this morning.

00:09What do you say to analysts who worry that lowering interest rates would actually lead to inflation?

00:14Well, if that happens and we just raise them, what you do is you lower them and let's see if there's inflation.

00:19Right now, there's no inflation. Everybody thought there would be.

00:22All we have is billions of dollars of cash pouring into our country

00:26from other countries that took advantage of us for many, many years.

00:30You know, they were taken advantage of.

00:32We were like the stupid people that didn't know what they were doing.

00:35They took advantage of us.

00:37Other countries, friend and foe.

00:39And by the way, the friend was oftentimes much worse than the foe when it comes to trade.

00:44We should be the lowest interest rate.

00:46And we're not. We're 38.

00:48Number 38 because of the Fed.

00:50It's all because of the Fed.

00:53He's done a bad job.

00:55No, he's got a meeting today, but I call him too late.

00:59You know, he's always too late.

01:00Despite elevated uncertainty, the economy is in a solid position.

01:04The unemployment rate remains low and the labor market is at or near maximum employment.

01:11Inflation has been running somewhat above our 2% longer run objective.

01:16In support of our goals, today the Federal Open Market Committee decided to leave our policy interest rate unchanged.

01:22We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments.

01:31Near-term measures of inflation expectations have moved up on balance over the course of this year on news about tariffs,

01:37as reflected in both market-based and survey-based measures.

01:41Beyond the next year or so, however, most measures of longer-term expectations remain consistent with our 2% inflation goal.

01:50At today's meeting, the Committee decided to maintain the target range for the federal funds rate at 4.25% to 4.5%

01:56and to continue reducing the size of our balance sheet.

01:59Changes to government policies continue to evolve, and their effects on the economy remain uncertain.

02:05Higher tariffs have begun to show through more clearly to prices of some goods,

02:09but their overall effects on economic activity and inflation remain to be seen.

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