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Report: Trump's protectionist decisions will lead to more rate hikes

Report: Trump's protectionist decisions will lead to more rate hikes
These decisions will cause import inflation
© The Associated Press

Baku. 7 March. REPORT.AZ/ US President Donald Trump's "protecionist" decisions will make Fed accelerate its discount rate further.

Analytical Group of Report believes, next week, the head of state is expected to sign an order on the application of customs duties when importing aluminum and steel.

The US will apply a long-term customs duty of 25% for steel and 10% for aluminum.

Analytical Group of Report News Agency believes, "protecionist" decisions will not end there and the European Union, China and other countries will take adequate steps. It is also not excluded that the US government will impose import duties on other raw materials and commodities.

As a result, import inflation will emerge in US. So, it is not expected that US metallurgical companies will soon be able to boost the sector and increase their production capabilities. Inflation, in turn, will spread to other sectors and will lead Fed to increase rates faster. From the second half of the year, inflation in the US is likely to surpass the targeted 2%. 

This can lead to an increase in rates by 0.5 percentage points.

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