in the USA Donald TrumpFollowing the elections that resulted in the victory of , the markets are looking forward to the upcoming elections to be held this evening. US Federal ReserveHe is focused on the (Fed) interest rate decision. Many financial institutions shared their opinions on the potential effects of the interest rate decision.
Uncertainty Predominates After Trump
According to JP Morgan, Fed President Jerome PowellAlthough he did not directly address the issue of increased spending following Trump’s election victory, he is aware of the effects of this development on the economy. Bank of AmericaHe stated that the Fed may view the impact of Trump’s tariffs on inflation as short-term price fluctuation and focus on the negative consequences of growth.
Standard Chartered He stated that the Fed will not want to surprise the market without digesting the impact of the election results, so it may wait for the interest rate increase. Pantheon Macroeconomics He also defended a similar view, suggesting that the Fed may have less room to cut interest rates with Trump taking office.
Banks’ Comments Point to the Possibility of Interest Rate Cuts
On the other hand JPMorganHe stated that the possibility of a post-election interest rate cut remains strong and that the Fed should be careful in its forward guidance. DBS Bank, on the other hand, thinks that the effective Fed funding rate has increased to 2.6 percent and that the Fed may cut interest rates this week, regardless of the election result.
Nordea Bank And Nordea MarketsHe is of the opinion that the effects of Trump’s policies on inflation will emerge over time and that it will take time for the Fed to break away from its dovish attitude. Amerivet SecuritiesHe stated that Trump’s victory will not change the possibility of a 25 basis point interest rate cut this evening, but central banks should be careful in the future. Finally NatixisHe stated that Trump’s tax policies could create inflationary pressure and weaken the Fed’s dovish stance.
While all these views increase uncertainty in the market before the Fed’s interest rate decision, different perspectives of banks give clues about the possible effects of the decision on the market.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
