JPMorgan Asset Management’s chief global strategist, David Kelly, recently said that if Trump wins the U.S. election, the Federal Reserve may suspend its easing cycle early next year. The reason for this is due to Trump’s expansionary fiscal policy plan which will lead to increased inflation and prevent interest rates from falling.
Kelly explained that if the Republican Party wins, there will be more expansionary fiscal policies, potentially leading to higher interest rates, trade wars, and increased deficits. However, if Vice President Harris wins, the economy may experience a soft landing, and the Fed is likely to maintain its accommodative policy.
