The US Federal Reserve (Fed) is concluding one of its most politically charged meetings in years on Wednesday. The general market expectation is a quarter-point interest rate cut. However, some members argue that the cut is “too little, too late,” while others claim it is “unnecessary.”
The meeting will not only announce the interest rate decision but also new projections reflecting the impact of Trump’s economic policies.
This will show how eight months of tax and trade policy changes have impacted the Fed’s economic forecasts. President Trump has been pressuring the Fed to cut interest rates more aggressively. During this process, he demanded the resignation of Fed Chairman Jerome Powell, followed by an attempt to remove Fed member Lisa Cook. However, the courts ruled that Cook could remain in office. Economic data has shown signs of weakening employment since the summer months, strengthening expectations of a Fed interest rate cut. Analysts predict three quarter-point rate cuts by the end of the year.Nevertheless, inflation risks remain strong. It is particularly noted that price increases could accelerate due to the impact of the Trump administration’s import tariffs. Oxford Economics Chief Economist Ryan Sweet said, “Inflation remains the Fed’s biggest headache.”
In conclusion, the Fed’s new economic projections and interest rate decision will be a critical turning point for both markets and the Trump administration’s economic policies.
