Trump Victory: Former Fed Official Loretta Mester Reportedly Says Pace Of Rate Cuts To Be Lower Than Anticipated Next Year

Former Federal Reserve policymaker Loretta Mester reportedly said on Tuesday that there could be fewer rate cuts next year than anticipated if President-elect Donald Trump’s proposed tariffs come into effect.

“Next year, the pace of the cuts will be affected by where they’re seeing fiscal policy,” she said at the annual UBS European Conference in London, according to a CNBC report.

Mester, who served as president of the Cleveland Federal Reserve till her retirement earlier this year, said, “my own view is the market is right, they’re probably not going to have as many cuts next year as was assumed or expected in September.”

Economists and market experts have been expressing concerns over the impact of potential increase in tariffs and mass deportations — proposals floated by Trump — as they expect this to stoke inflation and reduce the pool of cheap labor.

“It’s not just going to be tariffs. There’s things going on on immigration, there’s probably going to be things going on on the tax side, and there’ll be spending also,” Mester added.

Other officials too have expressed concerns over the impacts of potential tariffs in the upcoming times.

Minneapolis Fed President Neel Kashkari reportedly said on Sunday that retaliatory tariff increase by other countries in response to potential tariff raises by President-elect Donald Trump will create a lot of uncertainty.

“…if somebody imposed a 1% tariff or a 10% tariff, you would think that that would increase prices of those goods either 1% or 10%. That's pretty easy to model, and it shouldn't have an effect [in the] long run on inflation. The challenge becomes, if there's a tit for tat,” Kashkari said on “Face the Nation” on CBS.

Meanwhile, Trump’s victory has led to benchmark U.S. indices to hit record highs. The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust, Series 1 (QQQ) were trading marginally in the red on Tuesday morning.

One Stocktwits user expects a consolidation following the recent rally.

Another user believes tariffs could push inflation.

Also See: Shopify Stock Soars Pre-Market After Strong Q3 Earnings: Retail Chatter Shows Optimism

For updates and corrections email newsroom@stocktwits.com

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