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Jennifer Hewett

Inflation risk crashes into political risk

Market tantrums and the fall in the Australian dollar in response to the US Fed show that next year is likely to be even more volatile.

Jennifer HewettColumnist

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The market tantrums at the suggestion of fewer rate cuts to come from the US Federal Reserve next year is further proof 2025 is likely to be considerably wilder than 2024.

Reserve Bank governor Michele Bullock faces a similar dilemma to that of US Fed chairman Jerome Powell as they both try to ensure the inflation dragon won’t again burst out of the cave. But Powell also has to manage a more unstable political environment dominated by Donald Trump’s return to the White House on January 20.

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Jennifer Hewett is the National Affairs columnist. She writes a daily column on politics, business and the economy. Connect with Jennifer on Twitter. Email Jennifer at jennifer.hewett@afr.com

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    Original URL: https://www.afr.com/policy/economy/inflation-risk-crashes-into-political-risk-20241219-p5kzo3