The U.S. Federal Reserve has once again reduced interest rates, this time by 0.25%. This follows a previous 50 basis points cut made in September. According to the Fed’s report, the job market in the U.S. has weakened, and inflation is edging closer to the 2% target. With unemployment rates decreasing, the Fed decided to lower the interest rate to 4.50%. This marks the first rate cut since September, when it was reduced to 4.75%.
The Impact of Donald Trump’s Return to Office
After four years, Donald Trump has once again taken office as the President of the United States. During his campaign, Trump focused on issues like tax reductions, addressing illegal immigration, and increasing tariffs, all of which are expected to have a significant impact on the U.S. economy. Experts suggest that these decisions may contribute to rising inflation.
Fed Chair Jerome Powell noted that while it’s too early to predict the exact economic agenda of Trump’s administration, the interest rate may be reduced further to around 1% by 2025, with a potential decrease to 0.50% by 2026, depending on the economic conditions.
