Mester predicts fewer Fed rate cuts after Trump election win
Former Cleveland Fed President Loretta Mester stated that the U.S. Federal Reserve may implement fewer interest rate cuts next year due to President-elect Donald Trump's proposed global tariffs. Mester noted that the Fed's outlook will shift under the new administration's fiscal plans. Markets have adjusted their forecasts for rate cuts following Trump's election, anticipating a total of 1 percentage point in cuts by mid-2025. Mester agrees with this outlook, suggesting fewer than four cuts may occur next year, with a potential cut at the December meeting. Global policymakers are concerned about the impact of Trump's tariffs on the world economy. Olli Rehn from the European Central Bank warned that significant import duties could harm global economic stability, urging Europe to prepare for potential trade conflicts.