Trump really doesn’t hold back!
The US economy developed faster than expected in the last quarter and President Donald Trump has not lost time increasing the pressure on the federal reserve.
In an article on Truth Social, the president again called the president of the Fed, Jerome Powell:
“2q GDP just outside: 3%, much better than expected!” Too late “must now reduce the rate. No inflation! Let people buy and refinance, their houses!”
The message is clear: Trump wants prices and he wants it now. The Fed, however, does not yet seem ready to move. But we will know it soon.
The federal reserve should largely maintain interest rates unchanged at 4.25% to 4.50% at its meeting today. But Trump’s criticism, associated with a stronger economy and the softening of inflation, adds real pressure on the central bank.
The markets now assess 65% of a rate drop in September, according to CME data. The attention will be on Powell’s press conference later in the day for any index of what awaits us.
Trump has long accused Powell of being too slow to act, even giving him the nickname “Too late.” This quarrel continued last week during a visit to the Fed renovation project, where the two would have faced the costs.
What about the surprise growth of 3% of GDP?
According to the latest data, American GDP increased 3% in the second quarter, well above 2.4% forecasts of economists. This marks a solid rebound after the economy decreased by 0.5% to T1 – the first contraction in three years.
The reversal occurred while imports fell, lightening the drag on overall growth, while consumption expenditure was strong.
However, not all signs point to full force. A key measure, sales to private national buyers increased by 1.2%, compared to 1.9% in the previous quarter. It is the slowest rate since 2022.
Inflation is cooled – is the Fed ready to act?
There is another reason why the markets hope. The FED’s favorite inflation gauge, the PCE price index, slowed down 2.1% in T2, compared to 3.7%. The Core PCE also dropped to 2.5%.
It is a clear sign that inflation is busy, giving the Fed more space to reduce rates if necessary. However, the central bank can remember until confident that the trend will stick.
Read also: The White House publishes a crypto plan, but the details of the Bitcoin reserve lacked
Crypto market perspectives: bullish anyway
Despite the uncertainty around the next Fed movement, the cryptographic markets remain confident.
With the cooling of inflation and the bouncing economy, traders see strength in both directions. A September Cup could cause new momentum. But even if the Fed is stable for the moment, it signals stability and it is something that markets can work.
As always, all eyes will be in Powell’s tone later in the day. But in the world of cryptography, the situation as a whole begins to be a little clearer and much more promising.
