{"id":45529,"date":"2025-01-17T14:34:52","date_gmt":"2025-01-17T14:34:52","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/fed-may-pause-rate-cuts-in-january-amid-inflation-concerns-tied-to-trumps-policies-reuters-poll\/"},"modified":"2025-01-17T14:34:52","modified_gmt":"2025-01-17T14:34:52","slug":"fed-may-pause-rate-cuts-in-january-amid-inflation-concerns-tied-to-trumps-policies-reuters-poll","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/fed-may-pause-rate-cuts-in-january-amid-inflation-concerns-tied-to-trumps-policies-reuters-poll\/","title":{"rendered":"Fed may pause rate cuts in January amid inflation concerns tied to Trump\u2019s policies: Reuters poll"},"content":{"rendered":"

(Originally posted on : Invezz )<\/b>
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A slim majority of economists surveyed by Reuters believe the US Federal Reserve will hold its key interest rates steady during its January 28-29 meeting and likely resume cuts in March. <\/p>\n

The decision will be influenced<\/a> by the administration of President-elect Donald Trump, whose policy actions are expected to shape the economic outlook in the coming months.<\/p>\n

The poll, conducted just before Trump’s inauguration, suggests that any substantial rate cuts may be limited due to lingering inflation pressures and uncertainties surrounding the incoming president’s economic policies.<\/p>\n

Fed faces challenges amid rising inflation and new policies<\/h2>\n

While the Federal Reserve is expected to maintain its current policy stance for now, the prospect of an economic stimulus package from Trump\u2019s administration has fuelled concerns about rising inflation. <\/p>\n

“If they deliver anything close to what they promised on the tariff front, then we are going to probably see a stalling of disinflationary pressures, where the Fed is not going to be cutting,” said Jonathan Millar, senior US economist at Barclays.<\/p>\n

“At least at a minimum, not as rapidly as they did in the last fall, but also the possibility they could be on hold for quite a while.”<\/p>\n

Millar suggests that the Fed may not be able to cut rates as quickly as it did in the past, and there\u2019s a possibility it could keep rates on hold for an extended period if inflation increases as expected. <\/p>\n

This shift in the Fed’s policy approach would largely depend on how aggressively Trump pursues his economic pledges.<\/p>\n

Mixed outlook for the US economy and Fed rate path<\/h2>\n

Since the Fed\u2019s last rate cut in December, the US economy has shown signs of strength, with inflation cooling and a robust job market that saw impressive gains in December. <\/p>\n

This has led some economists to suggest that further economic stimulus may not be necessary, especially considering that the economy is already performing well.<\/p>\n

According to the poll, 103 economists participated, all predicting that the Federal Open Market Committee (FOMC) will keep interest rates at 4.25%-4.50% during the January meeting. <\/p>\n

A significant majority, about 60%, expect the Fed to begin cutting rates in March. <\/p>\n

However, economists have become more cautious about the future path of interest rate cuts, with fewer expecting significant cuts this year compared to previous projections.<\/p>\n

Trump’s policies and inflation<\/h2>\n

One of the key concerns for economists is how Trump\u2019s policies\u2014especially the introduction of tariffs, immigration restrictions, and new fiscal measures\u2014will affect inflation. <\/p>\n

The survey indicates that inflation is likely to remain above the Fed\u2019s 2% target at least until 2027, as the US economy adjusts to the changes brought on by the new administration.<\/p>\n

“We expect the FOMC to be confronted with a pickup in inflation associated with the new administration’s tariff, immigration and fiscal policies,” said James Egelhof, chief US economist at BNP Paribas.<\/p>\n

“Coming right on the heels of the high inflation of the post-pandemic recovery, we see (an) elevated risk that above-2% inflation becomes entrenched in the economy, leaving the FOMC pursuing a more cautious path to manage this risk.”<\/p>\n

Slower growth in the US economy?<\/h2>\n

Despite the anticipated inflationary pressures, the US economy is projected to continue expanding in 2025. <\/p>\n

The survey predicts a 2.2% growth rate for 2025 and 2.0% growth in 2026, which is faster than the Fed\u2019s current non-inflationary growth rate of 1.8%. <\/p>\n

This stronger-than-expected growth is likely to add to inflationary pressures, further complicating the Fed\u2019s policy decisions.<\/p>\n

Despite these concerns, most economists agree that a rate hike this year is unlikely. <\/p>\n

However, a strong economy and continued inflationary pressures could bring rate hikes back into consideration, but this is expected to be more of an issue in 2026, as policymakers adopt a wait-and-see approach in 2025.<\/p>\n<\/p>\n

The post Fed may pause rate cuts in January amid inflation concerns tied to Trump\u2019s policies: Reuters poll<\/a> appeared first on Invezz<\/a><\/p>\n

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(Originally posted on : Invezz ) A slim majority of economists surveyed by Reuters believe the US Federal Reserve will hold its key interest rates steady during its January 28-29 meeting and likely resume cuts in March. The decision will be influenced by the administration of President-elect Donald Trump, whose policy actions are expected to […]<\/p>\n","protected":false},"author":3947362359,"featured_media":45530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[39],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/45529"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362359"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=45529"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/45529\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/45530"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=45529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=45529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=45529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}