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The Federal Reserve Board of Governors will conclude its final meeting of the year tomorrow, and the biggest question on everyone’s mind is once again: “Will they cut rates?” President Trump has continued to push for more rate cuts since taking office.
Chances are, he’ll be happy with the decision, with economic data largely indicating that we will get another rate cut this month. According to financial planner Richard Rosso, “The CME FedWatch tool is at 89.6 percent. That’s obviously pretty good, and I think that’s why you’ve seen some wind in the sails in the market.”
He says that while inflation is still above the Fed’s 2 percent target rate, they’re also responsible for maintaining employment—and that’s what’s driving rate cuts right now. “When you see the job freeze that’s going on right now, for a multitude of reasons, that could obviously push you to do a rate cut,” he explained.
Rosso predicted that any rate cut we get this month will likely be slightly smaller, but you can expect more aggressive rate cuts next year—after Fed Chair Jerome Powell’s term expires and President Trump names his replacement.
He says that since the 2008 financial crisis, the stock market has been trained to be addicted to low rates—so regardless of what else is going on, you can expect major cuts next year.