15. 07. 2025 | Natalie Bezděková

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Donald Trump’s trade policies, especially the imposition of tariffs, will weigh on US consumers in the long run, according to most members of the US Federal Reserve (Fed). These developments may affect the Fed’s stance on interest rate changes. Their decisions will also affect foreign investors, including Czech ones, who have money in the US markets.

The Fed’s June meeting shows that although some members expect only a one-off rise in prices, most point to the possibility of a lasting effect of tariffs on inflation.
The meeting took place at a time when President Trump was putting pressure on the Fed to cut rates. He said on his Truth Social platform that they are at least three percentage points higher than they should be. They are currently between 4.25 and 4.50 percent.

Lower rates could boost the economy – companies would see their borrowing costs fall and the government would see its debt servicing costs fall. On the other hand, there is a risk that too-low rates could further spike inflation, which the Fed fears.

Fed chief Jerome Powell first announced in Congress that he would not support a rate cut until the fall, but later acknowledged the possibility of a change as early as July. A key factor in the decision will be the June inflation data due out next week.

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Natalie Bezděková

I am a student of Master's degree in Political Science. I am interested in marketing, especially copywriting and social media. I also focus on political and social events at home and abroad and technological innovations. My free time is filled with sports, reading and a passion for travel.