The Fed and Trump’s intentions will converge sooner than later
Policymakers will have to make assumptions about what the Trump administration will do, though for now, they can focus on the economy’s persistent momentum.
When US Federal Reserve chairman Jerome Powell faces the media after the central bank’s policymaking meeting next week, he’ll probably get a politically fraught question: How will the Fed incorporate president-elect Donald Trump’s stated plans – including tax cuts, tariffs and deportations – into its economic outlook and monetary policy?
In November, Powell’s response was categorical: “We don’t guess, we don’t speculate, and we don’t assume.” This time around, he’ll have to be more nuanced.
