US Fed Rate Cut Plans Likely Unchanged By Trump Victory
Date
11/7/2024 9:24:20 AM
(MENAFN- The Peninsula)
AFP
Washington: The US federal Reserve is widely expected to cut interest rates by a quarter point Thursday, looking beyond the election results to continue easing borrowing costs on the back of cooling inflation.
The US central bank sits just a short walk from the White House, where Democratic President Joe Biden will soon hand back the keys to Donald trump following the Republican's election win.
Despite the Political whiplash, analysts expect Fed policymakers meeting in Washington this week to eschew any drama.
"We still expect them to cut, at least in November," KPMG Chief Economist Diane Swonk told AFP Wednesday.
After hiking interest rates to a two-decade high last year in a bid to control runaway inflation, the Fed recently began lowering its key lending rate again, cutting by half a percentage-point in September and signaling more to come.
Since then, the Fed's favored inflation gauge has eased to 2.1 percent, while economic growth has remained robust.
The labor market has also stayed strong overall -- despite a sharp hiring slowdown last month attributed in large part to adverse weather conditions and a labor strike.
"Generally speaking, the US economy looks quite resilient, and the labor market still looks very good," Jim Bullard, the long-serving former St Louis Fed President, told AFP ahead of election day.
Bullard, who retired from the Fed last year to become dean of the Daniels School of Business at Purdue University, expects the Fed to lower its key lending rate by 25 basis points this week to between 4.50 and 4.75 percent.
He then expects policymakers to cut by the same amount at the final rate meeting of the year, in December.
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