While the Federal Reserve introduced a quarter-point rate cut at its November meeting, much of the discussion around the Fed has focused on its plans for 2025, particularly in light of the recent presidential election. Following the meeting, our Marty Green shared his thoughts with Newsweek on what 2025 may hold for the Fed.  

“Although the Federal Reserve reduced its overnight fed funds rate by a quarter point as expected today, its second consecutive rate reduction was overshadowed by the Treasury bond and mortgage market reactions to Donald Trump’s victory in the U.S. presidential election,” Green said. “While short-term rates have recently declined, longer-term rates like treasuries and mortgage-backed securities continued their march higher, as bond investors bet that some Trump pro-growth policies, if adopted, may have the unintended consequence of reigniting inflation. This scenario would limit the Fed’s flexibility to lower rates substantially down the road.” 

Read the full story here.