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US Fed Cuts Interest Rates Amid Economic Shifts

The US Federal Reserve has cut interest rates by a quarter of a percentage point, citing a job market that has “generally eased” while inflation continues to move towards the central bank’s 2 percent target. This decision comes as policymakers navigate a changing economic landscape with the election of Donald Trump as the next US president. The Fed’s statement will be interpreted in light of Trump’s return to power in January, which could have a broad and unpredictable impact on the economic landscape.
  • Forecast for 6 months: The US economy is expected to experience a moderate slowdown due to the uncertainty surrounding Trump’s policies, leading to a slight decrease in GDP growth rate.
  • Forecast for 1 year: The Fed is likely to maintain a neutral stance, keeping interest rates stable, as the economy adjusts to the new administration’s policies, potentially leading to a slight increase in inflation.
  • Forecast for 5 years: The US economy is expected to experience a period of slow growth, averaging around 2% annual GDP growth rate, as the effects of Trump’s policies and the Fed’s monetary policy decisions become more apparent.
  • Forecast for 10 years: The US economy is likely to undergo significant structural changes, with a potential shift towards a more protectionist trade policy, leading to a decrease in global trade and a reorientation of the US economy towards domestic production.

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