The various White House scandals won’t stop the Federal Reserve from raising short-term interest rates next month, economists said Thursday.
Analysts said they were not swayed by the fall in Wall Street expectations for a rate hike on Wednesday. Fed funds futures fell along with U.S. stocks on concerns that President Donald Trump’s pro-growth legislative agenda was in jeopardy.
“I’m pretty sure the decline in federal-funds futures is in response to things the Fed doesn’t care about,” said Thomas Simons, an economist at Jefferies.
“I don’t think they are concerned with a general dysfunction in Washington,” he said.
The Fed believes the economy has made cumulative progress toward full employment and 2% inflation and believes the level of interest rates as not being appropriate, Simons added.
“The [Fed] cavalry is not coming” to rescue investors from a market selloff, said Krishna Guha, vice chairman of Evercore ISI.
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