FOMC Meeting Begins Amid Market Uncertainty Following Election Results
The November FOMC meeting begins today, with a strong expectation for a 25-basis point interest rate cut.
Recent election results arrived too late to influence this month's decision. However, potential Republican dominance could affect market dynamics and December's outcome.
Fed funds futures markets indicate a 99.2% likelihood of a 25bps cut tomorrow, according to CME Group data, while the probability of another 25bps cut in December stands at 67%.
Donald Trump’s victory might impact the Fed's leadership and objectives. His proposed tax cuts and tariff increases could elevate inflation and the federal deficit, according to some economists.
Chair Jerome Powell’s term concludes in May 2026, allowing Trump to nominate a new central bank head. Trump has previously indicated he would not reappoint Powell and considered firing him in 2018.
Trump will also nominate a successor for Fed Governor Adriana Kugler, whose term ends in January 2026.
During tomorrow’s press conference, Powell is expected to address questions regarding the election and its implications for future policy.