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Fed Officials Divided on Rate Cut Despite Pressure from Trump

Fed Officials Divided on Rate Cut Despite Pressure from Trump

Bitget-RWA2025/11/24 23:20
By:Bitget-RWA

- The Fed faces internal division over December rate cuts, complicating Trump's push for lower borrowing costs amid conflicting economic signals. - New York Fed's Williams supports near-term rate adjustments, while Boston's Collins dismisses urgency, reflecting broader policy disagreements. - Trump's potential influence is limited by Fed dissent, with delayed inflation data and mixed labor market trends adding to decision-making uncertainty. - Global markets and geopolitical developments will shape investo

The Federal Reserve is approaching a crucial decision in December, as disagreements within the institution about a possible rate cut grow sharper, complicating President Donald Trump’s efforts to lower borrowing costs. New York Fed President John Williams has indicated openness to “short-term” changes to the federal funds rate, while Boston Fed President Susan Collins has minimized the need for immediate action, highlighting a deeper divide among policymakers.

facing Chair Jerome Powell, who must balance mixed economic data and mounting political pressure as his term draws to a close.

The main issue is whether the latest economic indicators support additional rate cuts.

, stated on Friday that lowering rates could help bring policy closer to a neutral level, a view shared by others favoring more accommodative steps. In contrast, serve as “a tailwind, not a headwind,” implying there is no urgent need to act. -which have been postponed until December 18—along with inconsistent labor market data, adds to the uncertainty.

Trump, who has often challenged the Fed’s independence, may find his ability to sway policy limited by these internal disagreements.

a more loyal chair next May to push for deeper rate cuts, but the current discord among Fed officials indicates that even a change at the top may not ensure consensus. attempts to reduce the Fed’s independence if his preferred policies are blocked.

Fed Officials Divided on Rate Cut Despite Pressure from Trump image 0
, as it offers insight into regional economic trends ahead of the December gathering. At the same time, , central bank moves in New Zealand and South Korea, and Tokyo’s inflation data—will also influence market sentiment. on Monday, buoyed by hopes for a Fed rate reduction and progress in Russia-Ukraine negotiations.

has forced policymakers to rely on September’s data, which revealed ongoing price pressures despite earlier optimism about easing inflation. confirmed that the October inflation report will not be issued, making it harder to gauge recent trends.

As the Fed weighs its options, the broader economic outlook remains fragile.

, supported by expectations of lower rates and increased political stability after the government shutdown. However, in the University of Michigan’s November poll, approaching record lows and signaling persistent economic worries.

The results of the December meeting will have significant consequences, not just for American markets but for global financial stability as well. With the Fed caught between opposing policy views and outside influences, the direction ahead remains unclear—reflecting the complex dynamics shaping monetary policy in today’s unpredictable environment.

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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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