Fed likely to freeze interest rates for years

The Fed has probably frozen interest rates for years. It is doubtful that the U.S. central bank will have the courage to lower them further and make [...] https://www.pinterest.com/pin/1085437947660215829/

The Fed has probably frozen interest rates for years. It is doubtful that the US central bank will have the courage to lower them further and make them negative. On the other hand, further such actions are demanded by politicians. So the U.S. faces a big dilemma today. The Fed, interest rates and Donald Trump President Donald Trump has for a long time almost openly fought the Fed to lower interest rates quickly and sharply. In fact, he continues to do so, as even recent decisions by the U.S. central bank, which after all finally realized the dream of the resident of the White House, were met with his complaining. What is Trump playing at? First of all, he wants to win the currency and trade war with China. And for that he needs a very cheap dollar to support exports. In addition, cheap money and unprofitable deposits also stimulate domestic demand. The US will hold another presidential election in the autumn. Trump - understandably! - wants to win them outright. The Fed itself has already cut interest rates to practically zero in March 2020. At the same time, it started an almost frantic printing of dollars - all in the name of fighting the crisis. Over three months, it increased its balance sheet from 4.2 trillion to more than 7.1 trillion dollars. The Federal Reserve bought everything from Treasury, mortgage and corporate bonds to ETF units investing in debt securities. Modern Monetary Theory in the US Politicians' appetites, however, are bigger. So the Federal Open Market Committee (FOMC) is thinking about what else to do to further loosen its loose monetary policy. The fact that it is already extremely loose doesn't seem to bother anyone right now. It looks as if the Fed is populated almost entirely by proponents of the controversial Modern Monetary Theory. This one assumes almost constant currency printing. So far, the FOMC has decided to keep interest rates at their current level, which is in the 0-0.25 percent range. The Committee "expects to maintain the current level of the federal funds rate until it is confident that the economy has recovered from recent events." This reportedly means 2022 in practice. Tags printing Donald Trump FED