🚨🚨 Key Insights Ahead of the Fed Interest Rate Decision🚨🚨
The U.S. Federal Reserve (Fed), which cut interest rates for the first time in approximately 4.5 years this past September, is set to announce its much-anticipated interest rate decision tonight.
Following a swift recovery from the recent U.S. elections, global focus has shifted to the Fed’s impending decision. In September, the Fed made an unexpected move by cutting rates by 50 basis points, the first reduction in years. For this meeting, market expectations point towards a more modest cut of 25 basis points.
Potential Impact of the Trump Factor
A notable point of speculation is whether the Fed might abstain from a rate cut altogether—a scenario not currently priced in by the markets. According to the Fed Watch Tool, which gauges future market expectations, the probability of a 50 basis point cut stands at 1%, while a 25 basis point cut is expected at 99%, making a non-cut scenario highly unlikely.
Historically, former President Donald Trump opposed rate cuts during the autumn months. Reports in the U.S. media even suggested that Trump advised Fed Chair Jerome Powell to "hold off on rate cuts until I return to office." This has raised questions on whether Trump’s stance could indirectly influence Fed decisions, a point of interest for market observers post-announcement.
Expectations for Rate Adjustments and Powell’s Commentary
Market forecasts indicate a reduction in rates from the current range of 4.75% to 5.0%. Attention will also be on Powell’s remarks concerning both the interest rate policy and any potential implications of the recent U.S. elections.
Powell is known for maintaining a non-partisan approach and has often emphasized that the Fed operates independently of political pressures. This stance is expected to be upheld in his upcoming address. Powell’s initial appointment came during Trump’s administration in 2018, and he was reappointed for a second term by President Joe Biden in 2022.