The Federal Reserve is expected to cut interest rates for the second time next week due to decreased inflationary pressures, which played a part in Donald Trump’s election victory. Trump’s economic policies have been criticized for contributing to inflation, and questions arise about political influence on the Federal Reserve’s decision-making.
Trump has called for more significant control over interest rates. While the Federal Reserve has traditionally kept its independence in setting borrowing rates, Trump has been pressing the organization to cut rates to benefit consumers and businesses. However, he has limited influence over mortgage and other long-term loan rates, which are determined by the bond market.
Consumer spending has remained strong, and some economists believe that further rate cuts could lead to an overheated economy and reignite inflation. Investors have driven up Treasury yields since the last rate cut, which is impacting the benefits of the Fed’s half-point reduction in its benchmark rate.
Bitcoin has been seen as a hedge against inflation, and some investors believe it could see a rally if the Federal Reserve decides on further rate cuts.
