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US Federal Reserve set to cut interest rates again amid post-election uncertainty

The US Federal Reserve is set to cut interest rates again this week as post-election uncertainty grows.
 
Federal Reserve officials are poised Thursday to reduce their key interest rate for a second straight time, responding to a steady slowdown of the inflation pressures that exasperated many Americans and contributed to Donald Trump's presidential election victory.
 
Yet the Fed's future moves are now more uncertain in the aftermath of the election, given that Trump's economic proposals have been widely flagged as potentially inflationary. His election has also raised the specter of meddling by the White House in the Fed's policy decisions, with Trump having proclaimed that as president he should have a voice in the central bank's interest rate decisions.
 
US equities markets surged on Wednesday after Donald Trump emerged victorious in the US presidential election.
 
Based on expectations of another rate cut of 25 basis points, the yield on the benchmark 10-year US treasury note zipped to 4.43% per annum.
 
Wake-up call to Europe 
 
In the meantime, Governor of the Banque Du France and a ranking member of the European Central Bank's Governing Council, Francois Villeroy De Galhau, has said a second Trump term in the White House means greater protectionism, higher inflation, higher interest rates, a protracted slowdown in world trade and the high probability of another great recession.
 
He added that the results of the US presidential election must be seen as a wake-up call to Europe out of its long slumber because it is now weak and technologically backward.


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