Fed's Mouthpiece: U.S. Election Results May Trigger a New Round of Inflation Risks

According to Jinshi Data, Nick Timiraos, a senior journalist at The Wall Street Journal known as the "Fed's mouthpiece", expressed his latest views. He pointed out that although the Federal Reserve has achieved results in its fight against inflation over the past two and a half years, the U.S. election could change this situation. The economic policies of both candidates may hinder further reduction in inflation. In particular, Trump's proposed comprehensive import tariffs, expulsion of workers and interest rate cuts are causing market concerns. Brian Riedl, former assistant to Republican Senate and current consultant at Manhattan Institute said that it is worth paying attention to the risk of worsening inflation by 2025. Recent increases in bond yields reflect market expectations that if Trump is elected it could lead to higher deficits and inflationary pressures. It is worth noting that currently consumer price index has dropped to 2.4%, close to pre-pandemic levels but any factors re-triggering inflation could cause Fed to slow down or even pause its plan for interest rate cuts.