JPMorgan: Expect WASH to cater to Trump's rate cuts in the short term, returning to a hawkish stance after the midterm elections

BlockBeats News, February 2nd, JPMorgan’s Chief U.S. Economist Michael Feroli predicted in a report that Powell may favor a rate cut in the short term, at least for this year. But he also warned: “Over time, especially after the midterm elections and as the government enters a lame-duck period, his stance is likely to shift, possibly even returning to a more hawkish stance.”

It is worth noting that JPMorgan has not adjusted its rate cut expectations due to Powell’s nomination. Feroli stated that even if Powell takes office, the bank still expects the Federal Reserve to remain on hold for the rest of this year.

Additionally, a former Federal Reserve official who worked with Powell also believes that the “real Powell” will eventually step forward. This anonymous official told CNN, “Powell has been eyeing this position for a long time. He is a smooth operator, extremely skilled at climbing the ranks. But this position is his lifelong pursuit. If he only acts meekly just to get the job, it would be a Pyrrhic victory. The longer he stays in this role, the more likely he is to demonstrate independence.”