In September 2024, the Federal Reserve finally started to cut rates after seeing lower inflation, strong labor markets and economic stregnth. The expectations at that point was for the Fed to cut rates 2 more times in 2024 and at least 4 more times in 2025. (1)
In November 2024, Trump was declared the winner of the presidential election and economists and Fed officials began to consider what impact policies around taxes, tarriffs and immigration would have on the economy. Going into the December FOMC meeting the expectation was for fed to cut rates 25bps, but the market was on edge as to whether the Fed plans to make further cuts in 2025. Could these new policies in the new year stoke or reignite inflation? (2)
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