The Federal Reserve announced another 25 basis point interest rate cut. At the subsequent press conference, when faced with a series of questions from reporters about whether he would resign at Trump's request, Federal Reserve Chairman Jerome Powell firmly responded 'NO' four times, indicating his stance: I will not be fired; Trump does not have that power!
With Trump returning to the White House, analysts predict that his policies may trigger re-inflation, making interest rate hikes a possibility next year. Powell stated that it is still too early to determine whether the Federal Reserve will need to raise interest rates next year, saying, 'I will not rule out any possibilities.'
The Federal Reserve concluded its two-day monetary policy meeting, announcing a 25 basis point reduction in the target range for the federal funds rate to between 4.50% and 4.75%, in line with market expectations.
At the subsequent press conference, when faced with a series of questions from reporters about whether he would resign at Trump's request, Federal Reserve Chairman Jerome Powell firmly answered 'no' four times, succinctly and powerfully expressing his stance.
The reason reporters are so eager to discuss Trump is that he frequently criticizes the Federal Reserve and its independence. During his last term as President, he even threatened to 'fire' Powell, but at that time, Powell clearly stated his refusal.
However, Trump stated in August this year that he would allow Powell to complete his term, which does not end until mid-2026.
However, with Trump returning to the White House, the inflationary impact potentially brought about by his policy proposals is the most troubling issue for Powell. After Powell's press conference, the number of rate futures traders betting on a pause in rate cuts in December increased, with the probability of a pause rising from less than 10% to 25.5%.
Some analysts even bluntly stated that considering the re-inflation issues brought about by Trump (referring to inflation that occurs as the economy moves from recession to recovery), interest rate hikes could also be an option next year.
In response, Powell stated that it is still too early to determine whether the Federal Reserve will need to raise interest rates next year. 'I will not rule out any possibilities.'
More notably, traders are now widely betting that the Federal Reserve will pause interest rate cuts in January 2025, before beginning a staggered rate-cutting process, with a total of three rate cuts expected starting in March 2025, aiming for a target federal funds rate range of approximately 3.50% to 3.75% by the end of 2025.
The next Federal Reserve meeting will be held on December 18, during which new economic forecasts will be released.
