The Fed was preparing to make a number of interest rate reduces totaling 1.5 % by the end of the year in the summer of 2024. Was it to support Donald Trump’s beat by Democrats?
Advertisement
Basically, the Fed does not include itself in elections. However, it’s not hard to deny that Jerome Powell, the chairman of the Federal Reserve, was using his weight to support Kamala Harris ‘ presidential campaign. In spite of clear indications that inflation was still a possibility, Powell quickly cut interest rates by a combined portion place in September and November.
In the end, the inflation increased by 2.9 % in December and by 3 % in January 2025. Then Powell must make it clear that there won’t be any more interest rate reductions for the near future, maybe even none at all this year.
The property market dropped 198 items, losing 0.5 % of its price on that information.
The Fed may remain on the sidelines ( as opposed to cutting rates ), according to Sameer Samana, head of global equities and real property at Wells Fargo Investment Institute. It will be a choppier direction than the previous two years, even though chance businesses can get higher.
” Core” C. P. I., which more closely reflects underlying prices by removing volatile food and energy costs, even showed little progress. It rose 0.4 percent from December or 3.3 percentage on a year-over-year schedule, both higher than economists expected. The quarterly increase in base rates was the highest since April 2023.
The main company’s strategy against higher prices was underlined by the January data. Although inflation has considerably decreased since peaking at just above 9 percent in 2022, progress has been much more sporadic in recent months.
Advertisement
The Federal Reserve Bank of Chicago Chairman, Austan Goolsbee, called the latest inflation report” sobering” . ,
” There’s no problem, if we got many times like this, then the task is clearly no done”, he said in an exam.
Previous Fed analyst Jonathan Wright, a doctor at Johns Hopkins University, claimed a price boost from the central banks is “at least as possible” as a rate cut in the near future.
That could really throw a damper on Trump’s business.  ,
Only before President Trump’s second term in office, there is a lot of uncertainty surrounding the economy’s future. The final plan combine will influence whether academics and policymakers will pay more attention to the potential for renewed prices or an unanticipated slowdown in growth, although taxes, deportations, tax cuts, and liberalization are expected to have an impact on the economy.
” The threats are to higher prices and lower growth”, said Alan Detmeister, a previous Fed economist then at UBS, of Trump’s ideas. Trump wants the Fed to cut interest rates a little more to offer buyers more confidence during major purchases.  ,
” BIDEN INFLATION UP”! Trump wrote on Truth Social. He advocated for lower interest rates as” something that would come hand in hand with future taxes”! “!
Advertisement
The Fed, however, has indicated that it is not urgent enough to cut interest rates, potentially injuring the leader who showed signs of complacency in his first year of office by repressing his demands for them. After cutting a percentage point in the final three months of last year, levels then range between 4.25 and 4.5 %.
Most academics seem willing with interest rates staying where they are for the time being. As long as inflation doesn’t get any higher, that’s likely what will happen.
