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James Knightley, Chief Economist, ING believes the Trump camp's approach is a "pro-America" stance as it is using aggressive tactics like proposing high tariffs—60% on China and 20% on others—to pressure other countries.
James Knightley, Chief Economist at ING, expects the US Federal Reserve to cut rates by 25 basis points (bps) at its next policy meeting on December 17-18, followed by three similar cuts in 2025.
So far in 2024, the Fed has reduced rates by a total of 75 bps. One bps is one-hundredth of a percentage point or 0.01%.
The latest US jobs report suggests that while there is headline payroll growth, the quality of the jobs being created in America isn't very good right now, and unemployment is creeping higher.
Therefore, the Fed feels there is scope for it to move policy a little bit closer to neutral. There is certainly a very strong chance they will do 25 bps rate cut but next week they will be signalling a slower, shallower path for rate cuts in 2025, he said.
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He believes the Trump camp's approach is a "pro-America" stance as it is using aggressive tactics like proposing high tariffs—60% on China and 20% on others—to pressure other countries.
While these measures would heavily tax US consumers, costing an estimated $800 billion, they are more likely threats to negotiate better deals rather than policies that will be implemented.
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