---
title: "JPMorgan Chase warns: If Trump wins on Wednesday, the Federal Reserve may pause the easing cycle as early as December"
type: "News"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/news/218745600.md"
description: "Analyst David Kelly expects that the Trump administration's policies will expand the fiscal deficit, thereby increasing inflation, which may lead the Federal Reserve to pause interest rate cuts. If Harris wins, the Federal Reserve will maintain an accommodative path"
datetime: "2024-11-05T00:25:43.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/218745600.md)
  - [en](https://longbridge.com/en/news/218745600.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/218745600.md)
---

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# JPMorgan Chase warns: If Trump wins on Wednesday, the Federal Reserve may pause the easing cycle as early as December

Tomorrow, the final voting for the U.S. presidential election will begin, and the election results are expected to be basically finalized by noon Beijing time on the 6th.

On Monday, JPMorgan analyst David Kelly stated in an interview with financial media Business Insider that if Trump wins the U.S. election this week, the Federal Reserve may pause its easing cycle as early as December.

Kelly believes that Trump's expansionary fiscal policy plan will drive up inflation and prevent interest rates from falling:

> "If Trump wins the election, he will adopt a more expansionary fiscal policy, which may trigger a trade war, expand the deficit, and increase interest rates."

Kelly also stated that **the Federal Reserve will almost certainly cut interest rates by 25 basis points in its decision on Friday, even if the election takes place before then.**

## If Trump wins, it will prompt the Fed to pause rate cuts

Trump's previously proposed tariff measures and his plans to crack down on immigration are widely believed to trigger inflation. This is because these plans will involve significant federal spending, thereby exacerbating the federal budget deficit.

Kelly believes that the impact of these policies will prompt the Fed to pause rate cuts. She stated:

> "I think the Trump administration will explore possible directions for fiscal policy. If fiscal policy looks like it will increase the deficit, increase fiscal stimulus, and increase inflation, **they may feel that if fiscal policy is expansionary, we must oppose this expansion and slow down the easing policy.**"

On the other hand, Kelly stated that **if Harris wins, the economy may continue to move toward a soft landing.**

> "If there is a split within the government, for example, if Harris wins, then I think the economy will continue to slowly and long-term soft land, overall appearing rather lackluster."

Kelly believes that **in this case, the Fed may stick to its expected path of policy easing.**

## Is a 25 basis point rate cut on Friday a done deal?

Kelly stated that unless inflation sweeps back in, the Fed will continue to adhere to the dot plot released in September. At that time, the chart indicated that **the Fed is expected to cut rates by another 50 basis points by the end of the year and further ease in 2025.**

Although the Fed operates independently, Kelly pointed out that **it still cannot completely escape the influence of political factors, as the development of political events may determine the direction of the economy.**

> "Once the Fed understands what measures fiscal policy will take, I think this will have some impact on their decision-making. They will not try to tell the federal government what to do, but they will respond to what the federal government is doing or may do."

Therefore, he stated that **the Fed will almost certainly cut interest rates by 25 basis points in its decision on Friday, even if the election takes place before then.**

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