The minutes of the Federal Reserve Council (the US Central Bank) showed that policymakers were almost unanimous in their meeting last month that the American economy faces the risk of slowing growth and accelerating inflation at the same time and indicated that the bank may face “difficult differentials” in the future.
The bank held its meeting on the eighth and nineteenth of March after Trump announced its intention to impose customs duties that sparked a state of fog about economic expectations and prompted policymakers to adopt a “cautious approach” that may lead to maintaining high interest rates for a longer period if inflation continues or reduced if the economy’s performance decreases to the point that require immediate intervention.
“Policy makers saw that the fogging state surrounding economic expectations was exacerbated, and almost all participants saw that the risk of inflation tends to escalate and the risks of employment tend to decline,” said the minutes of the meeting issued on Wednesday.
Some of those present at the meeting, according to the record, indicated that the Federal Open Market Committee may face difficult differentials if inflation continues and the growth and employment expectations decline.
Federal reserve officials in that meeting reduced their expectations for economic growth and raised their estimates of inflation during 2025 and reduced the number of possible interest rates by a quarter of a percentage point during the current year from 3 to 2.
Officials pointed to the increasing fog over Trump’s policies and its potential impact on the economy.
The bank said during the meeting that it will reduce the maximum value of the treasury bonds, which will be allowed to withdraw from $ 25 billion per month to five billion dollars starting from April, while maintaining the maximum withdrawal of real estate financing bonds of $ 35 billion.
