Following President Trump’s victory and strong economic data, the S&P 500 remains above pre-election levels. However, the Fed’s decision to potentially halt interest rate cuts could trigger a market correction due to a tightening monetary environment and rising Treasury yields. Experts weigh in on the potential impact.
The Consumer Price Index (CPI) rose to 2.6% in October, ending a six-month streak of decline. While this aligns with economist predictions, experts remain divided on the Federal Reserve’s next move. Some see a December rate cut as still possible, while others caution that the Fed might need to pause amidst persistent inflation pressures.
October inflation data came in line with expectations, calming investor nerves. The CPI rose 2.6% year-over-year, snapping six months of declines. Core inflation held steady, suggesting persistent underlying price pressures. This news fueled speculation of a December rate cut, with market probabilities jumping to 79%. US equities rose, Treasury yields and the dollar eased, reflecting a more optimistic outlook.
The annual inflation rate unexpectedly climbed to 2.6% in October, after six months of easing, raising concerns about the Federal Reserve’s ability to achieve its 2% inflation target. The report has led to speculation about a potential pause in interest rate cuts by the Fed, as policymakers remain vigilant about inflation pressures.
The re-election of Donald Trump has brought back the question of whether he can remove Federal Reserve Chair Jerome Powell. While the law technically protects Powell, Trump could choose not to reappoint him in 2026. Powell’s recent dovish remarks, including a potential rate cut in December, have sparked debate among economists about the Fed’s independence and future rate trajectory.
The return of Donald Trump to the US political scene has triggered market volatility, impacting the EUR/USD exchange rate. Trump’s potential return to protectionist policies could fuel inflation, potentially leading to higher interest rates and a stronger US dollar. Meanwhile, the Federal Reserve’s recent rate cut has reinforced the greenback’s appeal. Technical analysis suggests a bullish outlook for EUR/USD, with a potential retracement to 1.0758 before resuming its ascent towards 1.0833.
The Federal Reserve’s decision to cut interest rates by 25 basis points has sparked contrasting opinions among leading economists. While some see it as a necessary move to address inflation, others warn of persistent inflation risks and question the effectiveness of the Fed’s strategy.
Federal Reserve Chair Jerome Powell has firmly stated that he will not resign if former President Donald Trump requests it, reiterating his commitment to the Fed’s independence. Despite Trump’s past attempts to influence the Fed’s decisions, Powell maintains that the central bank’s policy decisions remain unaffected by political pressure.
Bitcoin reached a new all-time high, exceeding $76,000, while Ethereum climbed above $2,900. This surge was fueled by the Federal Reserve’s latest interest rate cut, boosting market momentum. Analysts see this as a potential sign of an upcoming “altcoin season” and predict further gains in both Bitcoin and Ethereum.
The Federal Reserve lowered interest rates for the second time in as many months, bringing the federal funds rate to a range of 4.5% to 4.75%. While the move was widely anticipated, economists are now analyzing the implications for the future of monetary policy. Some analysts see further rate cuts on the horizon, while others remain cautious about the economic outlook.
