With inflation showing signs of easing, the Federal Reserve is widely expected to implement its second rate cut of the year, reducing its benchmark interest rate by a quarter-point to around 4.6% when it concludes its two-day meeting on Thursday.
Despite the lingering uncertainty over the presidential race, which may remain unresolved when the Fed’s decision is announced, Fed policymakers appear set on lowering rates further, unaffected by the electoral outcome.
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However, the Fed’s future path could become less predictable once a new president and Congress take office in January.
If former President Donald Trump were to return to the White House, his proposed economic policies — such as steep tariffs on imports and mass deportations — could drive inflation higher, some economists caution, while others say it will drive prices down.
“From the day I take the oath of office, we will rapidly drive prices down,” Trump said in the Aug. 14 speech. “We’re going to make America affordable again.”
Led by Chair Jerome Powell, the Fed has already implemented a half-point rate cut in September and may follow Thursday’s anticipated reduction with another quarter-point cut in December.
Economists suggest the possibility of additional cuts next year, which would make borrowing cheaper for consumers and businesses, potentially spurring economic growth.
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