NEW YORK, Nov. 27 (Xinhua) -- The inflation risk stalking the markets eased over the summer, but it never really went away -- it's front and center again as investors contend with a Trumponomics crackdown on immigration, a rising trade-war risk and a potential bonanza of tax cuts, said experts.
"Donald Trump's latest trade threats show how uncertain the outlook could be," said the experts in an article contributed to The New York Times on Wednesday.
"Analysts have been gaming out the potential impact. Economists fear that it could add bottlenecks and costs to supply chains and reignite inflation, and that it could scramble the Fed's policy on interest rates," the article said.
A worst-case scenario from Deutsche Bank economists is that core personal consumption expenditures next year would jump by an additional 1.1 percentage points if the Trump tariffs were fully enacted, it said.
"Futures traders on Wednesday were pricing in roughly 60 percent odds of a Fed rate cut next month. But their calculations have been volatile in recent months, and a surprisingly hot number could cause a shift in thinking once again," said the article.
That said, the minutes from this month's Fed rate-setting meeting showed that central bank officials were still confident in their effort to bring inflation down, and that they saw more rate cuts on the horizon. Left unsaid was how many, it added. Enditem
Go to Forum >>0 Comment(s)