Federal Reserve's Hawkish Stance Raises Concerns Over Economic Outlook

According to Odaily, the Federal Reserve adopted a more hawkish tone last week, projecting higher inflation rates for 2025 than previously estimated and reducing the anticipated number of interest rate cuts for next year. Neil Dutta, an analyst at Renaissance Macro, expressed concerns that the Fed might find itself in a challenging position amid a seemingly slowing economic environment, potentially reverting to a more dovish stance. Dutta speculated that expectations regarding policies from the Trump administration, which Federal Reserve Chair Jerome Powell acknowledged some officials are now considering, could lead to changes in next year's forecasts. He suggested that the Fed appears to be taking precautionary measures against potential tariff impacts by slowing the pace of rate cuts. Dutta warned that this approach could be risky, given the apparent weakening of the economy's underlying momentum.