The trade war shakes Deutsche Bank's hawkish view on the Federal Reserve, making interest rate cuts within the year no longer impossible

ChainCatcher news, according to Jin10, Deutsche Bank's economic team holds the most hawkish view on the Federal Reserve's policy for 2025 on Wall Street, predicting that the Fed will not cut interest rates this year. While this remains the team's official stance, Chief U.S. Economist Matthew Luzzetti acknowledged that the impact of Trump's new tariffs could jeopardize this forecast.

"You have certainly started to see some negative effects of trade uncertainty in the economic data," Luzzetti said, "If this impact broadens and is reflected in weak labor market data, the Fed may cut rates this year." However, Luzzetti stated that Deutsche Bank wants to see how long the tariffs will last before changing its forecast for the Fed.