The Federal Reserve maintained steady interest rates in January amid slowing inflation progress and uncertainty surrounding the new presidential administration's policies. Deutsche Bank chief US economist Matthew Luzzetti joins Morning Brief to analyze the central bank's decision.
Luzzetti explains that Fed Chair Jerome Powell's focus on strong economic growth, robust labor market conditions, and decelerating inflation progress, combined with uncertainty about Trump administration policies, indicates "they don't need to be in a hurry; they're in waiting mode."
Regarding policy outlook, Luzzetti anticipates a tax bill featuring potential tax cuts alongside the implementation of new tariffs, particularly targeting China and Europe. He warns these measures could potentially "dent" US economic growth while helping to "lift inflationary pressures this year."
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This post was written by Angel Smith