What Trump's Win Could Mean for the Federal Reserve

What's Happening

Economy

What Trump's Win Could Mean for the Federal Reserve

What's going on: The US economy is about to get a Trumpian makeover but, before that, it received a planned cut from the Federal Reserve. Yesterday, the Fed reduced its benchmark lending rate for the second time this year. The quarter-point decrease will hopefully continue to ease inflation without weakening the labor market, providing some much-needed relief for consumers. But the emphasis is on “some.” Economists say the initial impact may be minimal (yes, you might still be cringing every time you hit the grocery store for a while, sigh), but experts anticipate yet another cut in December and maybe more in 2025, as the Fed aims for a gradual decline. 

What it means: The Fed’s announcement, just days after the presidential election, has sparked questions about how President-elect Donald Trump’s policies will affect inflation and job growth. Many Americans liked the sound of Trump’s micro-level economic plans, including cutting taxes on tips, overtime pay, and Social Security benefits. But economists are torn on whether his larger plans — like imposing tariffs on US imports and deporting immigrants — will help or hurt economic growth. Some worry Trump’s tariff proposals could drive up costs for consumers without necessarily creating more jobs. Meanwhile, some experts fear Trump might try to pressure the Fed to accelerate rate cuts or that he'll fire Federal Reserve Chair Jerome Powell. But as Powell notes, this is not The Apprentice, and he can’t be fired because it’s “not permitted under the law.”

Related: RFK Jr. Is Ready To Serve — Here’s What He Has Planned For Public Health (NYT Gift Link)

Politics

With Only 73 Days Left — The White House Works To “Trump-Proof” Biden's Policies

What's going on: President Joe Biden vowed there’d be a peaceful transfer of power in his first remarks since former President Donald Trump’s victory. In a speech, he said, “You can’t love your country only when you win.” He also touted his administration’s accomplishments — some of which his team has tried to “Trump-proof,” according to an official. In the months leading up to the election, the Biden admin implemented safeguards to ensure job protections for some civil workers — whom Trump could replace with party loyalists if he manages to bring back his “Schedule F” executive order. The outgoing president has also allocated billions of dollars to help Ukraine in its ongoing war with Russia — a level of aid that Trump has criticized.

What it means: The sands of time are quickly passing for Biden, and there’s only so much he can do to shore up a legacy that many say is already tarnished. NPR reports that the Trump administration may not be able to roll back some of Biden's policies due to the lengthy and complex regulatory process, which can take months or even years. But some current US officials say that Trump can reverse much of the work Biden tries to get done in these final months, particularly if Republicans gain control of Congress. As one Biden official put it: “You really can’t ‘Trump-proof.’ You can ‘Trump delay,’ you can throw sand in the gears, but there is no way short of legislation to ‘Trump-proof.’”

Related: Sen. Bernie Sanders (I-VT) Called Out the Dems After the Election. They Aren't Happy (The Guardian)

Politics

The Country’s Reaction to a Trump Victory Feels Different This Time Around

What's going on: When former President Donald Trump won the 2016 election, many on the left viewed his win as a major lapse in the democratic system. Then-candidate Hillary Clinton had won the popular vote despite losing the electoral college. Eight years ago, Democrats issued a call for action — organizing protests, starting new organizations, and encouraging people to run for office. This year, the response has been…different. Some voters told The New York Times that their social media is striking a more somber tone this time around, with calls to protest largely absent. For Trump’s supporters, they are welcoming his return to the White House, believing he will undo the status quo.

What it means: The response to Trump's reelection could be attributed to the fact that many Americans — more than 73 million — want him in office. Meanwhile, the social media landscape has also changed since the first Trump presidency. It's become more insular thanks to algorithms putting users in small bubbles, slightly shifting the way people are having conversations. Some on the left have abandoned X, previously Twitter, after Trump ally Elon Musk took over the platform and reshaped it to reflect his own views. There’s also a sense of “collective fatigue” and burnout among Democratic voters and activists, with some questioning the value of civic engagement when so many Americans support a Trump presidency. Still, some people are trying to organize, looking to help the communities that could be impacted by Trump's policies. 

Related: Postelection, Black Women Ask: Where Do We Go From Here? (NYT Gift Link)

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