US President Donald Trump said inflation had “completely subsided”, pointing to falling prices for some everyday items and strengthening economic data.
In a speech from the White House, President Trump criticized Democrats for repeatedly using the word “affordability” and said they were to blame for the inflation problem in the first place. Prices are currently falling and could fall further, he claimed.
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However, official data shows inflation remains at just under 3%. The Consumer Price Index rose 3% from a year earlier, and the Personal Consumption Expenditure Index rose 2.8%, both still above the Federal Reserve’s 2% target.
President Trump wants say on interest rates
President Trump also said he wanted to discuss future interest rate decisions, which he claimed has been common in past decades. Because the central bank operates independently, the U.S. president traditionally has no involvement in Federal Reserve policy decisions.
President Trump has confirmed that he has narrowed his candidates for the next Federal Reserve chair to two candidates: former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett.
Polymarket shows Kevin Hassett as the front-runner to become the next Fed chairman, with implied odds of about 52%, ahead of former Fed director Kevin Warsh of nearly 40%.
Fed independence remains strong
Kevin Hassett, one of Trump’s front-runners, later clarified that if he were elected Fed chairman, the president’s views would not influence interest rate decisions.
Asked on Face the Nation with Margaret Brennan if the president’s voice carries as much weight as the voters, Kevin replied: “No, he doesn’t. All that matters is whether his opinion is good and whether it’s based on data.”
Hassett said the Fed’s job is to maintain its independence, and interest rates are determined by committee votes based on economic indicators. The Fed chair may hear opinions from a number of sources, including the president, but those opinions do not have a vote.
How will virtual currencies react?
Analysts say several economic factors are influencing market expectations. These include a focus on pushing down the 10-year Treasury yield, signs that quantitative tightening may end on December 1, and recent PMI data showing economic activity contracting to 48.2.
Taken together, these conditions are believed to support risk assets. Cryptocurrency markets are typically slower to react than stocks and bonds, but they often see larger price movements when momentum starts to build.
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