The fed: the politics of madness or common sense?

ФРС: политика безумия или здравого смысла?

Us stock market on Thursday began with the fall. With the opening of the quotes declined on wall Street but fears that they, like Wednesday, are waiting for the collapse has not been confirmed. Why? Data on inflation published an hour before the opening of trading, has softened the blow.

Core inflation is a key indicator used by the Federal reserve when setting interest rates. To improve their (quite drastically) the regulator may, if the prices do not grow as fast as analysts had forecast. It was afraid of the markets. The increase in interest rates means the end of an era of accommodative monetary policy of the Central Bank of the United States. In a nutshell: drop the leading American indexes on Wednesday happened because the us economy is on the rise.

Steady GDP growth, low unemployment and core inflation – all of these factors for the Central Bank – a guide to action. Donald trump seems to disagree. The second day he criticizes the Federal reserve system, calling it a policy of “aggressive” and solutions are “crazy”.

“I think the fed is making a mistake. They are so hard. I think the fed has gone mad”, – said the President of the United States.

In turn, the head of the International monetary Fund Christine Lagarde has stood up for the Chairman of the Federal reserve system Jerome Powell, saying that “I would not associate his actions with madness”.

“Obviously, this is a logical development for those countries whose economy demonstrates high growth rates, inflation, or increases, or decreases within the allowable range, and the unemployment rate is very low. Then the Central Bank takes such decisions. And it is inevitable, “she said.

As for the EU, investors are afraid of the ongoing debate on the budget of Italy and, of course, “brakcet”. As a result, European exchanges closed sharply lower.

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