This is how brutal the match for the US Federal Reserve will be

The USA are after Deutschland and still ahead Italy is Austria’s second most important export market. What happens next in terms of economics and economic policy in the United States after Donald Trump’s election victory is of utmost importance for many domestic companies.

In particular, Trump’s plans Tariffs on imports to increase are widely discussed. Higher US tariffs could provoke violent reactions from existing partners and ultimately lead to a veritable trade war. Then the cash-strapped US government budget would receive billions in additional revenue from tariffs, which Trump hopes to finance his tax reduction plans. But they should higher import prices increase inflation heat up again in the USA.

Inflation is currently under control. She has that US Federal Reserve Bank (Fed) last Thursday ordered the second key interest rate cut after the interest rate turnaround in September.

But what happens next?

Analysts and bank economists expect one for December 70 percent probability a third rate hike by the Fed by a further 0.25 percentage points. Then there will likely be a longer break to see from spring 2025 whether and how Trump actually implements his tariff plans and “America First” policy.

Most observers currently expect that the round of interest rate cuts will end in mid-2025 US key interest rate of 3.75 to 4.0 percent will be achieved.

That’s a lot of trouble explosive for the relationship between Trump and Fed President Jerome Powell. Because Trump, as is his nature, wants to stimulate US growth to the maximum and lower interest rates serve to achieve this, among other things.

Powell, whose term ends in May 2026, has always emphasized that he will never be guided by political considerations. Powell recently emphasized that he does not want to give up, even if Trump asks him to do so. And his removal is not legally possible.

US expert and financial market expert Monika Rosen said in an interview with KURIER: “Yes, unfortunately it is to be feared that Trump will build up verbal pressure against the Fed. But the independence of the world’s largest central bank is theirs highest good and this independence “I have to defend Powell as best I can.”

Against a really dirty one Mudfight between Trump and Powell Of course, what speaks is the unrest that excessively violent attacks from the White House would trigger on the financial markets. Rosen: “Trump has a heart for Wall Street. That’s also part of the euphoria that you can currently see on the markets.”

Trump is threatened less with stock developments than with US government bonds. His economic program is likely to drive US national debt from the current 100 to 140 percent of GDP, and the annual deficit could rise from six to eight to nine percent. Rosen: “If the discussion about US creditworthiness comes up, it could cause a lot of unrest, weaken the dollar and that would be a problem big own goal for the next US government.“