Fed ‘relents to Trump’ on interest rates

THE US Federal Reserve has been accused of ‘kowtowing’ to Donald Trump after it scaled back plans for interest rate increases.

The Fed is not expecting to raise interest rates at all this year, having previously pencilled in two rises. Only one increase is expected in 2020. The decision will be seen as a boost for President Trump, who has piled pressure on Fed chairman Jay Powell not to raise rates too fast for fear of harming the stock market and wider economy.

Kevin Doran, of trading firm AJ Bell, said: ‘Despite protestations to the contrary, it seems evident that the Fed is kowtowing to stock market reaction to the prospect of higher interest rates and increasing levels of political interference.

‘Maybe we should cut out the middle-man and leave Trump to announce rates on Twitter?’

The Fed has also cut forecasts for growth in America from 2.3pc to 2.1pc. It said: ‘The labour market remains strong but that growth of economic activity has slowed from its solid rate in the fourth quarter.’