Is it wise for the Federal Reserve to cut interest rates by 25 basis points?

On December 17, Jinshi data, CNBC respondents surveyed in December firmly believe that the Federal Reserve will cut interest rates this week, but they are not sure if they should cut interest rates. 93% of people believe that the Federal Reserve will cut interest rates by 25 basis points. But only 63% of people think this is what the Federal Reserve should do. Respondents’ expectations for 2025 are for two more interest rate cuts, each by 25 basis points, lower than the three cuts in the previous survey. By this time next year, the Intrerest Rate will drop to 3.8%, and by the end of 2026, the Intrerest Rate will drop to 3.4%, slightly higher than the average neutral Intrerest Rate. A huge unknown is the fiscal policy of the new government. The survey shows that the prospect of elected President Trump’s tariffs and potential deportation of immigrants has restrained some people’s upward economic forecasts. Economist Robert Fry said, I have never been so uncertain about the inflation outlook. Trump has provided us with a combination of raising inflation (tariffs, tax cuts) and dropping inflation (relaxing regulations, cutting spending). Who knows what we will end up with?