Analyst: Wosh's first interest rate decision faces a major credibility test

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Golden Finance reported that on June 18, analyst Marte said this week’s meeting is the first major credibility test faced by Wash taking office as the chair of the U.S. Federal Reserve, with investors, policymakers, and the public all watching to see whether he will uphold the central bank’s political independence. Although Trump said he hopes Wash will remain independent when setting interest rates, he has continued to imply that he wants to see borrowing costs lowered. However, some investors said that if Wash fails to send a strong signal on the inflation issue, he may face the risk of losing control of the bond market. Consumer prices rose 4.2% year-over-year in April, the fastest pace in more than three years. If the new Federal Reserve chair gives the impression that he is trying to change the 2% inflation target threshold, it could cause yields to rise—further suppressing the economy, contrary to Trump’s expectations. A peace agreement between the US and Iran could ease some of the pressure on fuel prices, but it may take time to filter through to consumers.
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