Last week, the Federal Reserve's tone became more hawkish. It projected that the inflation rate for 2025 would be higher than previously estimated and reduced the expected number of rate cuts for next year. Neil Dutta, an analyst at Renaissance Macro, wrote that in an economic environment that seems to be slowing down, the Federal Reserve may find itself in a difficult position and subsequently revert to a more dovish stance. He questioned whether expectations regarding the Trump administration's policies—Powell acknowledged that some officials at the Federal Reserve have now taken them into account—would lead to changes in next year's forecasts. The Federal Reserve 'seems to be taking precautions against potential tariff shocks by slowing down the pace of rate cuts.' Dutta wrote, 'Given that the underlying momentum of the economy appears to have weakened, this approach is quite risky.'