Opinion: The Fed Will Not Ride to Trump's Rescue in a Trade War

BlockBeats News, April 10th, Roubini Warns Wall Street Against Betting on Fed to Aggressively Cut Rates

Renowned economist Roubini, also known as the "Doomsday Doctor" for accurately predicting the global financial crisis, has issued a new warning to Wall Street: traders should reduce their bets on the Federal Reserve intensifying rate cuts to mitigate the impact of President Trump's trade war.

Roubini, who believes the U.S. will avoid a recession and expects the Fed to keep rates unchanged for the rest of the year following a de-escalation in tariff-related policy disputes, stated, "This is definitely a showdown between the Trump bottom and the Powell bottom," adding, "But what I'm saying is that Powell's exercise price will be lower than Trump's bottom, meaning Powell will wait for Trump to blink first."

Fed Chairman Powell recently mentioned that the economic impact of new tariffs could be far greater than anticipated, and the central bank must ensure this does not lead to a worsening inflation problem. Traders this week have been digesting expectations of three to five Fed rate cuts of 25 basis points each, with some on Wall Street even speculating that the Fed may make an emergency rate cut before the next meeting. (IG)