Trump’s trade war risks undermining his hopes of hefty US interest rate cuts
The Guardian • • nation
Key Points:
- After the Supreme Court rejected Donald Trump's global tariffs, he responded by imposing new tariffs of 10%, later raised to 15%, risking increased inflation and complicating hopes for interest rate cuts.
- Trump's trade war aims to boost US investment and innovation by encouraging domestic production, while tariffs have generated significant revenue, estimated at $110 billion from imports.
- The higher tariffs are expected to keep import costs and inflation elevated, posing challenges for the Federal Reserve and its incoming chair, Kevin Warsh, who faces a divided committee on interest rate policy.
- Market expectations for Fed rate cuts have diminished amid rising inflation measures, and Warsh's less communicative approach to monetary policy could increase uncertainty and volatility in financial markets.
- Economic experts
