- Reuters noted that U.S. President Donald Trump’s decision to jack up tariffs on goods from China had fueled market bets Friday that the Federal Reserve will cut interest rates later this year, with one Fed policymaker suggesting he could be receptive if economic data deteriorates.
Asked Friday if the new U.S. tariffs could lead to a rate cut, Atlanta Fed President Raphael Bostic did not rule it out.
“Depending on the severity of the response, it could,” Bostic told reporters. “It really depends. It depends on what businesses decide to do and then it depends on how long the tariffs are in place.”
Note: A range of Fed speakers next week may return market attention to the Fed’s operational framework review and if this is to be a theme among them, that could counter out some of the downside play to risk.
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