BNP Paribas: Fed will formulate policy taking into account inflation risks

Economists at BNP Paribas wrote that it may be difficult for Fed officials to set and discuss monetary policy "without getting embroiled in a debate about President-elect Trump's potential economic policies." They expect the FOMC to cut rates by 25 basis points next week, as markets have priced in. They added that Fed Chairman Jerome Powell "may use the press conference to offer options for a pause in further monetary easing." They do not expect him to comment directly on Trump's policies, "but the FOMC will set policies consistent with managing the risks of high inflation," the economists said. (Jin Shi)