Fed's Cautious Approach to Rate Cuts Amid Inflation and Tariff Concerns

Deutsche Bank warns that potential Trump-era policies, such as inflationary tariffs, could hinder the Federal Reserve's rate-cutting plans. While some analysts expect continued rate cuts into 2025, Deutsche Bank's chief U.S. economist, Matthew Luzzetti, suggests that resilient consumer spending, a stable labor market, and higher inflation could lead to a pause in rate reductions. The Fed's upcoming December meeting will provide updated economic forecasts, but significant policy changes may not be reflected until March.