US President Donald Trump says will not have Fed raising interest rates
US President Donald Trump landed in South Korea on Wednesday for the final leg of his Asia trip. Trump stated that we will not have the Federal Reserve (Fed) raise interest rates.
Key quotes
South Korea is one of few locations with lasting democracy.
This is a very speical country business leaders for APEC.
Thanks South Korea President Lee for an important meeting.
We've secured commitments of over $18 trillion in new investments.
Probably $21 or $22 trillion of investments will be coming to the US by the end of my second term.
Expects 4% GDP growth in the next quarter.
Factories are booming in the US.
Will not raise interest rates.
Semiconductor manufacturing is rapidly returning to the US.
We are serious partners with South Korea.
Planning to have very thriving shipbuilding sector.
We're providing expedited licenses to investors.
South Korea buying a lot of our weapons.
Streamlined permitting for new energy and mining projects.
Economic security is national security.
Significant factor in series of new investments has been trade policy.
Trade deal with South Korea will be finalised very soon.
Chinese President Xi is coming tomorrow, I think we are going to have it.
I think it will be great deal for both the US and China.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
