Jerome Powell makes clear the Fed is already thinking about life under Trump

Published On Dec 19, 2024, 7:57 AM

Jerome Powell, Chairman of the Federal Reserve, indicated that the Fed is preparing for potential economic policies under President-elect Donald Trump. During a press conference, he referenced previous analyses of tariffs from Trump’s first term and acknowledged uncertainty regarding the impact of possible new tariffs and immigration policies on inflation and monetary policy. The Fed recently lowered its interest rate and anticipates more policy changes, but Powell emphasized the need to assess the new administration's actual policies before making definitive changes to the Fed's strategy.

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Considering the discussions around inflation due to potential tariffs and the Fed's current strategy to lower interest rates, sectors sensitive to interest rate changes (like real estate and utilities) might benefit. However, companies exposed to trade tariffs could suffer. Investors should consider ETFs or stocks in sectors likely to experience volatility from these policies.

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