JPMorgan Chase: Trump's victory may prompt the Federal Reserve to pause rate cuts as early as December

David Kelly, Chief Global Strategist at JPMorgan Asset Management, said that if Trump wins the U.S. election this week, the Federal Reserve may pause its easing cycle as early as December. This is because Trump's expansionary fiscal policy plan will push up inflation and prevent interest rates from falling. Kelly pointed out that if the Republicans score a sweeping victory in Trump's win, there will be more expansionary fiscal policies rolled out which could trigger a trade war and increase deficits, leading to higher interest rates. On the other hand, Kelly stated that if Vice President Harris wins, the economy might continue on its soft landing trajectory. In this case, the Federal Reserve may stick to its expected path of easing policy.