The Fed reduced interest rates by 25 basis points after its last meeting, which the markets priced in. The news was in the US central bank’s forecast table. And here there were surprises with the improvement of 1 tenth in the growth outlook for the US in 2025, up to 2.1%. A boost that will be accompanied by a rise of 4 tenths of inflation, which will reach 2.5% next year.
The Fed, therefore, draws a reflation scenario (stimulating growth to avoid a recession) which is understandable given the arrival of Donald Trump to the White House and the implementation of his clearly inflationary policies. In this context, It is logical that the entity should be extremely cautious and reduce the perspective of rate cuts for 2025 from 4 to 2.
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