Amid concerns that some of President-elect Donald Trump's proposed policies, like tariffs and immigration reform, could be inflationary, the market waits for the Federal Reserve's next move in its ongoing rate easing cycle as the central bank grapples with uncertainty around the economic impact of the new administration's policies. Moody’s Analytics chief economist Mark Zandi joins Seana Smith and Brad Smith on Morning Brief to discuss his expectations for the Fed.

Zandi says 2025 is "going to be about economic policy coming out of the new administration, everything from the tariffs to immigration policy, deportations and of course tax and spending policy ... Big fiscal policy changes dead ahead and so, I think, that's front and center and the Fed's going to just have to react to that."

The economist notes, "The Fed's going to be kind of a bit player, but it's got to it's got to get it right, otherwise this really good economy that we're experiencing now will be significantly diminished."

"I expect the Fed to continue to normalize rates. They're going to probably cut rates in December [and] at least once in the first quarter of next year. But, having said that, if we do see big changes on the tariff front and immigration front and tax spending policies are very uncertain, I think the reaction of the Fed may be to pause rate cuts because they don't know how is this all going to play out."

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This post was written by Naomi Buchanan.