The Fed Could Crush Trump’s Bull Market — Here’s the Warning Wall Street Is Missing
The S&P 500 has seen repeated highs as investors bet on President Donald Trump's second-term agenda, but the Federal Reserve's potential response to inflation could threaten the bull market. The Fed may keep interest rates higher for longer due to stubborn inflation and strong economic growth.
Markets have rallied on President Donald Trump's second-term agenda, with cyclical sectors outpacing the broader market. However, the same policies fueling growth could reignite inflation, forcing the Federal Reserve to keep interest rates higher for longer. The latest Consumer Price Index report showed inflation at 3.3% year over year, above the Fed's 2% target. The economy remains strong, with 2% annualized GDP growth and unemployment near 4.3%. Trump's policies, including expanded tariffs and new tax cuts, risk reigniting inflation and putting pressure on the Fed. The Fed may be forced to hold rates high, potentially ending the bull market.
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