Pan Sen Macro: Trump's tariff policy will slow down the pace of Fed interest rate cuts

According to Samuel Tombs from Pantheon Macroeconomics, with Trump’s upcoming presidency and the possibility of new import tariffs, this could weaken the Fed’s room for interest rate cuts. Trump is entering his second term and has promised to increase tariffs to protect American manufacturers. Tombs said that foreign governments will respond, which will lead to inflation and prevent the core inflation rate from returning to the Fed’s target. Therefore, the Fed may slow down the pace of interest rate cuts, although it will still cut rates by 25 basis points on Thursday.