Just two days after President Donald Trump won the election, the Federal Reserve decided to make another widely expected interest rate cut, lowering it to 4.25% from 4.5% in September. The move continues the Fed’s pivot to lower interest rates to finish out this year and heading into 2025.

In an official statement, the Fed’s Federal Open Market Committee said in a press release:


Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/2 to 4-3/4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.


Fed Chair Jerome Powell said that “even with this cut, policy is still restrictive” and made it known that they will keep reducing the key federal funds rate over the next two years eventually to “neutral,” as he called it.

However, as with most of Powell’s speeches, the Fed Chair paints a very rosy picture that often conflicts with federally reported data.

Powell was of course asked a number of questions relating to President-elect Trump. There have been murmurings that Trump might seek to have Powell replaced from his chief role. Powell was very adamant that he’s not going anywhere and will not resign.

A reporter asked, “Some of the President elect’s advisers have suggested that you should resign. If he asked you to leave, would you go?” Powell said sternly, “No.” When asked, “Can you follow up on do you think that legally you’re not required to leave?” Powell answered, “No.”

Trump was a critic of Powell during his administration as well. Trump had called for negative interest rates in 2019, referring to Powell as a “bonehead” and naive.

However, Trump also indicated earlier this year when laying out his economic platform that he would allow Powell to finish out tenure through 2026, though Trump has no real power to do this anyway. “I would let him serve it out, especially if I thought he was doing the right thing,” Trump said at the time.

Trump has also said that he believes he should have a seat on the FOMC board to have a say in policy decisions for the Fed when it comes to setting interest rates.


AUTHOR COMMENTARY

Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.

Trump is a fan of low rates and cheap helicopter money. That’s why he intends to cut the corporate tax rate some more, and will continually call for lower rates. Under him – even though the Fed acts autonomously (and orders him about as far as I am concerned) – I suspect the U.S. will see some very low interest rates again, which opens the floodgates for more money printing and currency devaluation; at the same time looking to impose tariffs on everyone, and very hefty tariffs on China and anyone else who is looking to de-dollarize (so, that’s about over six dozen or so countries at the moment); which is nothing more than a tax that we will have to pay for.

It was not that long ago that BlackRock CEO Larry Fink very plainly stated, “I’m tired of hearing this is the biggest election in your lifetime. The reality is over time, it doesn’t matter.” It will be, for the most part, business as usual. Trump, just like last time, will not even do half of what he and his cronies are promising. However, you can expect rate cuts, corporate tax cuts, steep tariffs, vast money printing, stock market smashing records daily, a greater transition towards crypto and stablecoins, and tokenization, and an expanded war in the Middle East and most likely with China.

SEE: Tokenization: The New World Order Monetary System To Digitize All Assets And Nature, Including You


[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).

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