Tonight, another president will take the show away from Trump

The Federal Reserve (Fed) will hold an interest rate meeting on Thursday, according to the consensus, a 25 basis point interest rate cut will follow. The briefing after the decision promises to be particularly interesting, President Powell can now express his opinion on Trump’s change in economic policy after knowing the results of the presidential election. As a result, higher inflation and interest rates can be expected, which means that some level of re-planning may also be necessary on the part of the Fed.

However, inflation is only one aspect, the rate in September was 2.4 percent, but the Fed indicated at the last meetings that from now on, they will pay at least as much attention to the development of unemployment.

It is expected that due to the election of Donald Trump, Fed President Jerome Powell will be asked a lot of questions, mostly about what kind of reaction the central bank can prepare to the higher inflation due to the economic stimulus measures. If the market receives answers that can be strictly evaluated, it can bring further strengthening of the dollar.

Next year can be exciting as well, according to the forecasts, we can prepare for a 3×25 basis point interest rate cut by the middle of 2025.

Speaking to CNBC analyst however, according to him, the head of the Fed will not be in a hurry.

What is certain is that Trump’s old-new economic policy (tax cuts, higher budget expenditures, aggressive customs policy), if implemented, will not pose any task to the leaders of the Fed, since such a series of measures will surely accelerate inflation, unlike Trump’s first during his term, when it remained below 3 percent even with the same economic policy.

CNBC also reminded that Trump often criticized Powell between 2017 and 2021 and argued in favor of keeping interest rates low. Now it is also an interesting question how the interest rate reduction cycle changes in monetary policy, that is, what interest level would the Fed agree on.