It's "Will they?" or "Won't they?" day for the Fed

Marketplace Morning Report

American Public Media

News, Business

4.5 • 808 Ratings

🗓️ 7 May 2025

⏱️ 8 minutes

🔗️ Recording | iTunes | RSS

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Summary

And it’s looking like they won’t. As the Federal Reserve meets to determine the future of interest rates, don't hold your breath for any rate cuts. We'll give a preview of what to expect and hear about the added pressures the Fed is under given President Donald Trump's trade war. Plus, a handful of companies are responsible for major productivity growth, and Canadian truckers are being hit hard by tariffs.

Transcript

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0:00.0	Don't hold your breath for lower interest rates today.
0:04.7	I'm David Brancaccio in Los Angeles. The Federal Reserve wraps up its meetings in about four hours with Chairman Powell's public briefing. Let's bring in from Austin, economist Julia Coronado, founder of macro policy perspectives. Good morning. Good morning.
0:19.4	So you're going to be at the edge of your seat in
0:21.1	anticipation. What will happen? The suspense. Will they lower interest rates today? Not really.
0:26.8	Nobody really expects them to cut interest rates today or probably really anytime soon. So we're
0:34.1	going to get a whole lot of wait and see from Chair Powell. That's going to make
0:38.0	the President of the United States mad. He wants lower interest rates. Like China gave itself today,
0:43.5	lower interest rates because of tariffs. Yeah, there's a couple of tensions the Fed is facing. On the
0:49.2	one hand, we are likely to see growth slow because of the trade war, and that would tell the Fed that they
0:55.3	should lower interest rates. On the other hand, we're going to get a burst of inflation,
0:59.2	and inflation is still above their 2 percent target. So that tells them to wait and gather
1:05.1	information. So the real content today won't be interest rates up or down, you say flat,
1:14.0	but how the Fed views the economy,
1:18.2	how they're assessing things at the moment. And I think they're just going to tell us there's a range of possible outcomes. And as the data come in and tell them how bad the inflation burst is
1:25.2	versus the hit to the economy, they will weigh those forces and make their
1:30.0	decisions accordingly. They really can't foreshadow what they're going to do it or when they're
1:34.8	going to do it.
1:35.8	Economist Julia Coronado is also a professor at the University of Texas, Austin. Thank you.
1:40.4	My pleasure.
1:41.0	Again, China cut its interest rates by one quarter of one percentage point today to stimulate the economy weighed down by U.S. tariffs and ongoing distress in the property sector there. China and the U.S. have announced plans for talks between the U.S. Treasury Secretary and China's Vice Premier later this week in Switzerland.
1:59.5	Who doesn't want to get more done in less time?
2:02.0	Whether it's doing the dishes or running a business, productivity is the name of the game.
	...

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