Analyst: The Fed's hawkish turn is very dangerous for the economy

Golden Ten Data News on December 23, last week, the tone of the Fed became more hawkish. It expects inflation in 2025 to be higher than previously estimated and reduces the number of expected rate cuts next year. Neil Datta, an analyst at Renaissance Macro, wrote that in an apparently slowing economic environment, the Fed may find itself in a disadvantageous position and then return to a more dovish stance. He suspects that expectations for Trump administration policies - Powell acknowledges that some Fed officials have now taken them into consideration - will lead to changes in next year's forecasts, and the Fed "seems to be slowing down the pace of rate cuts as a precautionary measure against potential tariff shocks." Datta wrote: "Given that the potential momentum of the economy appears to have weakened, this (approach) is very dangerous."