Shadow Chairman Hassett speaks out: A 25 basis point rate cut should happen next week! In an interview with Fox News, he clearly stated that the Federal Reserve should cut rates at next week's meeting! This is a common goal of Hassett and Trump.

In my view, although Hassett is dovish, he is also very pragmatic. He did not call for a 100 basis point cut, but rather said that if the market reaches a consensus on a 25 basis point cut, he would be willing to accept it. Moreover, he emphasized that the chairman must be highly sensitive to data, which indicates he is also trying to find a balance between policy inclination and central bank independence.

But Deutsche Bank has poured cold water on this! They believe the market is too optimistic about a dovish shift. Even if Hassett takes office, implementing rate cuts will face significant obstacles; by mid-2026, the fundamentals of the U.S. economy may not support substantial rate cuts. The hawkish members within the Federal Reserve Board will pose resistance.