Bad News for People Traveling with Credit Card Costs: Powell Just said Yes!

First things first, you might think that paying less for travel would be something people would want. Think again. President Donald Trump has recently taken steps to make the economy more unpredictable. Yet, the Federal Reserve’s top boss Jerome Powell, announced that they are not in a hurry to cut interest rates. Why isn’t Powell in a rush? Last year, the Fed slashed interest rates a full percent over three meetings. Businesses and consumers might be celebrating these low-interest rates, but higher prices are already appearing as the Consumer Price Index (CPI) is hovering closer to 3% than the Fed’s goal of 2%. And guess what? The Fed is now focused on lowering even more. This means credit card costs will rise, and the threat to US economic growth is increasing because of the President’s policies. The outlook is uncertain. Over the past few weeks, investors have been focused on whether the Federal Reserve would decide to cut interest rates again. But Jerome Powell only said an ambiguous things about the interest rates. Interest rates are the mysterious factor for who travels. The main downside to the President’s current actions that are beyond the Fed’s control, like tariffs, and the threat of mass deportations.Hope and fear are both in high demand. With the Trump administration’s policies it’s anyone’s guess which way the economy might go. The Federal Reserve’s task has been more complicated than before. The Fed’s new challenge is dealing with the uncertainty brought on by the President’s actions due to his economic shock therapy. Let’s preach for a few minutes. Think critically about these data. The Fed may be taking a long-term view of the economy. President Trump is pursuing policies that, while ambitious, are fraught with uncertainty. Trump has set people on edge, businesses are unsure what to expect. That's the reason for the recent spikes in consumer prices. Trump has plans to turn up his policies even more – so uncertainty is sure to be part of the picture for a while and the future remains cloudy. The Federal Reserve won't entertain the idea of lowering interest rates, at least for the moment. But interest rates will remain elevated for the time being. What's the catch? The Fed won't rush to hold interest rates steady at the Federal Reserve meeting in March. Economists are still trying to figure out the next potential hike or if Powell will keep those rates steady. Are you feeling nervous about the future of the economy? Don't be! Be as comfortable with uncertainty as you can.