The incoming Trump administration is prompting global economic uncertainty. Fed officials anticipate higher inflation and interest rates, while Canada grapples with potential tariffs and bitcoin's status faces scrutiny.
The world's economic reckoning with the incoming administration of U.S. President-elect Donald Trump began in earnest this week, with some Federal Reserve officials penciling in estimates for higher inflation and restrictive interest rates, a surprise resignation in Canada over budgeting for prospective tariffs and a hyper focus on a potential status upgrade for bitcoin.
The Fed cut rates as expected on Wednesday amid a busy year-end run of central bank meetings from Ottawa and Frankfurt to Tokyo and London that showed officials starting to deal with heightened uncertainty ahead of the world's largest economy coming under Trump's leadership early in the new year. Indeed, Fed officials not only dialed back projections for how much further U.S. borrowing costs can fall in the face of stiffer-than-expected inflation, Fed Chair Jerome Powell said some among them were already taking a shot at judging how Trump's plans such as higher tariffs, lower taxes and a crackdown on immigration might affect their monetary policymaking in the months ahead. The upshot was U.S. central bankers penciled in estimates for higher growth next year than previously estimated, but also notably higher inflation. That left Powell repeatedly citing a need for'caution' about committing to additional rate cuts from here, a tone that triggered a slide in stock prices and a recalibration of market estimates for further easing: Just a single Fed rate cut is now priced in for 2025. 'Some people did take a very preliminary step and start to incorporate highly conditional estimates of economic effects of policies into their forecasts at this meeting,' Powell said in response to a question about the degree to which Trump factored into officials' thinkin
FEDERAL RESERVE ECONOMIC FORECAST DONALD TRUMP TARIFFS BITCOIN
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