CNBC: Market expects only two rate cuts this year even under new Fed chair appointed by Trump
BlockBeats News, January 27th, according to CNBC reports, despite expectations of a new Fed chair appointed by Trump in the coming months, CNBC survey respondents only expect a slight change in the federal funds rate over the next two years.
The survey results are broadly in line with the pricing of the federal funds futures market, showing that both Wall Street insiders and economic forecasters do not believe that the next Fed chair will significantly cut the overnight rate to the low level desired by the president. The survey shows that the market's average expectation is for two more 25-basis-point rate cuts this year, totaling 50 basis points, with no cuts expected in 2027. The federal funds rate is expected to remain around 3% this year and stay at this level until 2027.
Trump has stated that U.S. rates should be among the lowest globally and has called on the Fed to cut rates to 1%. Against a background of around 2% inflation, this request effectively means a negative real interest rate.
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