For example, in his testimony last month, Mr. Powell, the leader of the Federal Open Market Committee, said that “with a strong job market, inflation close to our objective and the risks to the outlook roughly balanced, the F.O.M.C. believes that — for now — the best way forward is to keep gradually raising the federal funds rate.”
Analysts saw that phrase and honed in on “for now.”
“The inclusion of those words diluted the signal for continued gradual tightening, but not necessarily in a dovish or a hawkish way,” Jim O’Sullivan, chief United States economist for High Frequency Economics, wrote this week. “Rather, as we have been discussing, their inclusion continued the recent trend toward reduced forward guidance: The pace of tightening could be stepped up or slowed down, depending on the data.”
That still seems possible, particularly from Mr. Powell’s recent testimony, but the statement only points one way for now.
The Fed will not be bullied.
Mr. Trump has made no secret of his disagreement with the Fed’s rate increases, tweeting last month that the central bank’s moves undercut the United States economy and that its pattern of rate increases “hurts all that we have done.”
The president, who had accused the Fed of keeping interest rates artificially low to help President Barack Obama, now appears ready to blame the central bank for trying to slow down a booming economy.
Mr. Powell has insisted the Fed is an independent body that moves in response to economic data, not political pressure. The statement seems to back that up. We’ll have to wait for direct questioning at the next meeting, but for now, the Fed is telling Mr. Trump, in its very Fed way, to mind his own business.