11/12/2024

'Blinders on' but Be Prepared

In 2016, the Fed took note of Trump's plans

Within weeks of Donald Trump's 2016 election, U.S. Federal Reserve policymakers began mulling the impact of expected tax cuts and tariffs on the economy, penciling in rough estimates of what was to come, with some among them concluding higher interest rates may be needed to keep inflation in check.

That included Jerome Powell, then a Fed governor and now the central bank's chair with chief responsibility for setting the course of monetary policy through the first 16 months of Trump's next term. The Republican former president defeated Democratic Vice President Kamala Harris in last Tuesday's election and will be sworn into office in January 2025.

Transcripts of the Fed's Dec. 13-14, 2016, meeting, before Trump had taken office, show Powell then said that because of the "expansionary fiscal stance" anticipated under the incoming administration "somewhat tighter policy is likely to be needed."

Please select this link to read the complete article from Reuters.