LITTLE ROCK (KATV) — The Federal Reserve is keeping interest rates unchanged. Analysts say today’s decision shows the central bank is waiting to see how the Trump Administration’s policy changes will shape the U.S. economy.
Before this announcement, numbers put out by the Organisation for Economic Co-operation and Development on Monday provided a dim outlook for the economy. They predict economic growth will slow this year and next, while prices could pick up to a rate of 2.8%, which is higher compared to last year.
Talks of tariffs are both reality and looming, as the president says he’s not backing down and is expected to announce new tariffs on April 2.
“It’s a liberation day for our country because we’re going to be getting back a lot of the wealth that we so foolishly gave up to other countries,” Trump says.
Experts say more tariffs could lead to rising inflation, but still two weeks out from this announcement, uncertainty remains, as State Economic Forecaster Michael Pakko shared with KATV today on Little Rock ARC.
“I think once we get a grip on exactly what kind of environment we’re gonna be in, that might alleviate some of the anxiety and some of the uncertainty and make the path forward a little bit more clear,” Pakko says.
Watch the full interview with Pakko on Little Rock ARC:
He says today’s announcement was as expected.
Pakko expressed inflation could be higher and consumers could end up spending less, which could pose a threat to our economy.
“I guess the concern might be that it becomes a self-fulfilling expectation,” Pakko says. “That if firms are uncertain about the future, they’ll hold back on their investment plans, their hiring decisions, households might cut back on their spending, maybe cut back on not going on that vacation, not to buy that new car, and that does create economic weakness in their real economy.”
Many Trump supporters feel the need for this pain before the gain. Senator Tom Cotton from Arkansas praises Trump’s tariffs.
“Well, President Trump has been clear that the tariffs on Mexico and Canada are to level the playing field because they put many tariffs on our products that are much higher than we have ever put on theirs, and second, to get their cooperation to do things like stop the flow of deadly drugs into our country,” Cotton says.
While from a nationwide standpoint, things seem uncertain right now, Pakko says the economy specifically in Arkansas remains strong.
