Just a few weeks ago, the path ahead for the Federal Reserve looked straightforward: With inflation cooling and the job market slowing, the Fed appeared on track to steadily cut interest rates. In September, its officials predicted they would reduce their benchmark rate four times next year, on top of three rate cuts this year. Yet that outlook has swiftly changed. Several strong economic reports, combined with president-elect Donald Trump’s policy proposals, have led to a more cautious tone from the Fed that could mean fewer cuts and higher interest rates. Retired Ripon College economist Paul Schoofs says that’s concerning. Trump has proposed higher tariffs on all imports as well as mass deportations of undocumented immigrants-steps Schoofs and most economists say would worsen inflation. The president-elect has also proposed a menu of tax cuts and deregulation, which might spur economic growth but would also fan inflation if businesses couldn’t find enough workers to meet increased consumer demand.
