The reduction in borrowing costs comes just two days after Donald Trump won a second term as president, heralding likely economic policy shifts that may fuel inflation.
by Jim Tyson
CFO Dive
Dive Insight:
The reduction in borrowing costs comes just two days after a general election in which Donald Trump won a second term as president. His return to the White House heralds likely shifts in U.S. economic policy that may fuel inflation and influence coming FOMC decisions.
Trump during the campaign promised to cut a variety of taxes, a move that would fuel economic growth and likely increase price pressures. He also pledged to impose tariffs on all imported goods by between 10% to 20%, with levies on goods from China as high as 60%.
Both policy changes may complicate efforts by the Fed to curb inflation to its 2% goal from more than 9% two years ago.