Potential Policy Changes May Impact Inflation, Says Economist

According to Odaily, Bank of America economist Stephen Juneau highlighted in a report to clients on Thursday that upcoming potential policy changes could exert upward pressure on prices. These changes include higher tariffs, deficit-financed tax cuts, and stricter immigration policies. Juneau noted that due to these policy shifts, the core Personal Consumption Expenditures (PCE) inflation rate is unlikely to decrease significantly over the next two years. In the upcoming meeting, the Federal Reserve is expected to acknowledge the lack of progress in controlling inflation. Juneau suggests that the Fed might pause interest rate cuts in January next year. He also warned that policy changes during a potential second term for President Trump could prolong this pause. The economist's insights underscore the challenges the Federal Reserve faces in managing inflation amid evolving economic policies.