Potential Treasury Secretary Paulson: Trump expects the Fed to cut interest rates to 2.5% by the end of 2025
Hedge fund "The Big Short" John Paulson predicts that the Federal Reserve will cut interest rates in the coming months, expecting them to drop to 2.5% by the end of 2025. He stated that the Fed waited too long to take rate-cutting measures and emphasized that economic policies, especially interest rate issues, need to be discussed by the President and the Treasury Secretary. He is one of the potential candidates for Treasury Secretary under Trump
According to the financial news app Zhitong Finance, the famous American investor and hedge fund "Big Short" John Paulson stated that the Federal Reserve waited too long to cut interest rates and he expects the central bank to lower rates in the coming months.
In an interview, Paulson said, "My best guess" would be that by the end of next year, the federal funds rate will be "around 3%, maybe 2.5%." Paulson, known for heavily shorting mortgage-backed securities before the 2008 financial crisis, is considered as a potential candidate for Treasury Secretary if Trump wins the election.
On Thursday, he attended an event at the New York Economic Club with Cantor Fitzgerald LP CEO Howard Lutnick and Scott Bessent of Key Square Group LP, where Trump promised to lower corporate tax rates, reduce regulations, and audit the federal government.
Earlier this year, media reports suggested that Trump's advisors were considering weakening the independence of the Federal Reserve. Paulson stated that it is very important for the President and Treasury Secretary to comment on economic policies, including interest rates.
Paulson pointed out that the rise in real interest rates (the difference between current bond yields and current inflation rates) indicates that the Federal Reserve is lagging behind in easing monetary policy