TechFlow news — On November 21, according to Jinshi Data, Olivier Blanchard, former chief economist of the International Monetary Fund (IMF) and senior fellow at the Peterson Institute for International Economics, shared significant insights. He pointed out that three key economic policies under Donald Trump would substantially drive up inflation: imposing higher tariffs on imported goods would overheat the economy and push prices upward; mass deportation of undocumented immigrants would trigger labor shortages and wage increases; and tax cuts would further exacerbate economic overheating.
Latest market data shows the probability of a rate cut in December has dropped below 60%. Federal Reserve Chair Jerome Powell recently stated clearly, "The economy has not sent any signals that we need to rush into lowering interest rates." Surveys by foreign media indicate that most economists now expect the Fed’s rate cuts in 2025 will be smaller than previously anticipated due to the impact of Trump's policies.
Blanchard predicted the risk of conflict between the Federal Reserve and a potential Trump administration is "very high." He believes Powell will remain "firmly" committed to maintaining higher interest rates until his term ends mid-2026, and that his successor will continue to uphold the Fed’s mission of preserving stability and low inflation.
