Analysts: Fed's hawkish turn is dangerous for the economy
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According to the report from Gold Ten, the Federal Reserve's tone became more hawkish last week. It expects the inflation rate in 2025 to be higher than previously estimated and has reduced the number of expected rate cuts next year.
Analyst Neil Datta of Revive Macro wrote that the Federal Reserve may find itself in an unfavorable position in an economic environment that appears to be slowing, and may return to a more dovish stance. He suspects that the expectations of the Trump administration's policies - which Powell acknowledged that some Fed officials now take into account - will lead to changes in next year's forecasts, and the Federal Reserve "seems to be taking precautionary measures against potential tariff shocks by slowing the pace of rate cuts." Datta wrote: "Given that the potential momentum of the economy appears to have weakened, this (approach) is very dangerous."
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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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