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Investment Bank: The Federal Reserve will cut interest rates by 25 basis points tonight, and it will take time to eliminate the dovish tendency."

According to online reports, Nordic Bank analyzed that with Trump's victory in the U.S. election and the Republican Party likely controls both the House and Senate, the market should expect that most of his campaign promises will be fulfilled. The Fed could automatically cut interest rates by 25 basis points tonight and in December because they believe current rates are restrictive. If the current strong economic development continues, coupled with the impact of Trump's victory, the Fed should soon become less certain whether these pre-emptive interest rate cuts are necessary. It will be some time before the impact of Trump's policies on inflation is reflected in CPI data, but we should start to see the impact on more hiring and lower immigration early next year. We are not sure when the Fed will ultimately decide to stop cutting rates, but the most likely is that before the dovish-leaning FOMC is persuaded, the Fed will cut rates again by 25 basis points in March next year, although there is also a high probability that there will be no rate cut in 2025.

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