**Powell’s Fed Predicted to Resist Trump’s Rate Cut Pressure, Favoring Only Two Cuts by 2026**
Barclays analysts are projecting a more cautious approach from the Federal Reserve under Jerome Powell, anticipating only two interest rate cuts through 2026, despite potential pressure from a returning Donald Trump administration. This prediction contrasts sharply with Trump’s historical preference for lower interest rates and his past criticism of Powell for not cutting rates more aggressively. The former president has repeatedly voiced his belief that lower rates stimulate economic growth and boost the stock market, a viewpoint he’s likely to reassert if he returns to the White House.
This divergence in views sets the stage for a potential clash between a future Trump administration and the Fed. Barclays analysts believe Powell, having navigated previous political pressures, will likely maintain his focus on controlling inflation and ensuring long-term economic stability, even in the face of calls for more substantial rate cuts. Their analysis suggests the Fed will prioritize data-driven decision-making over political expediency, forecasting a gradual easing of monetary policy rather than a rapid series of cuts. This measured approach reflects the Fed’s concern about reigniting inflation if rates are lowered too quickly. While acknowledging the potential for political pressure influencing monetary policy, Barclays maintains that the Fed’s commitment to its dual mandate – price stability and maximum employment – will ultimately guide its decisions.
Ultimately, the trajectory of interest rates over the next few years will depend on a complex interplay of economic data, political pressures, and the Fed’s independent judgment. If Barclays’ prediction proves accurate, it suggests that the Fed, under Powell’s continued leadership, is prepared to resist external pressures and maintain a steady course, prioritizing long-term economic stability over short-term political gains. This potential standoff between a possible Trump administration and the Fed could have significant implications for the US economy, making it a key area to watch for young people interested in finance and economics. Understanding these dynamics will be crucial for navigating the financial landscape in the coming years.
