18-12-2024, 08:05 AM
Trump promised “interest rates cuts the likes of which you have never seen before” while campaigning.
Fed officials have been cutting rates since September and are on course to lower them further as inflation cools, but they are unlikely to reduce them as much as Trump is hoping.
A combination of strong growth, a resilient labour market and somewhat stubborn price increases could add up to slower Fed rate cuts in 2025 than central bankers themselves expected as recently as September.
Trump’s policies could further delay rate reductions if they seem likely to stoke higher inflation.
And even in a best-case scenario, few if any economists think that Mr Powell’s Fed will return its policy rate to the near-zero level that prevailed in 2020 – the setting that was the backdrop for the record-low mortgage rates that Trump has been promising to bring back.
https://www.straitstimes.com/business/ec...with-trump
Fed officials have been cutting rates since September and are on course to lower them further as inflation cools, but they are unlikely to reduce them as much as Trump is hoping.
A combination of strong growth, a resilient labour market and somewhat stubborn price increases could add up to slower Fed rate cuts in 2025 than central bankers themselves expected as recently as September.
Trump’s policies could further delay rate reductions if they seem likely to stoke higher inflation.
And even in a best-case scenario, few if any economists think that Mr Powell’s Fed will return its policy rate to the near-zero level that prevailed in 2020 – the setting that was the backdrop for the record-low mortgage rates that Trump has been promising to bring back.
https://www.straitstimes.com/business/ec...with-trump