Trump's Election May Impact Federal Reserve's Rate Cut Expectations

According to Odaily, market strategists from IG have indicated that the election of Donald Trump as President of the United States has directly influenced the expectations for Federal Reserve rate cuts before 2025. The potential 'red wave' suggests minimal resistance to his tax cuts and spending plans, coupled with his stance on increasing tariffs. Strategists have noted that this scenario could complicate the Federal Reserve's efforts to combat inflation. As a result, the Fed may adopt a more cautious approach in its future easing processes, suggesting upward pressure on yields and the strengthening of the dollar. Currently, traders estimate a 68% probability of a 25 basis point rate cut by the Federal Reserve in December, compared to an approximately 83% likelihood before Trump's victory.