CNBC: Even under a new Federal Reserve chair appointed by Trump, the market still expects only two rate cuts this year.
BlockBeats News, January 27, according to CNBC, although a new Federal Reserve Chair appointed by Trump is expected in the coming months, respondents surveyed by CNBC only expect minor changes in the federal funds rate over the next two years.
The survey results are basically in line with the pricing of the federal funds futures market, showing that neither Wall Street professionals nor economic forecasters believe the next Fed Chair will sharply cut the overnight rate to the low levels desired by the President. The survey shows that the market's average expectation is for two more rate cuts of 25 basis points each this year, totaling 50 basis points, with no rate cuts expected in 2027. The federal funds rate is expected to stabilize at around 3% this year and remain at that level until 2027.
Trump has stated that US interest rates should be among the lowest in the world and has called for the Fed to cut rates to 1%. With inflation at about 2%, this demand would actually mean a negative real interest rate.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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