Skip to content
Subscriber Only
Opinion
Mohamed A. El-Erian

What Trump Means for Interest Rates

The Fed's projections and the expectations of markets could converge.
Face-off.

Face-off.

Source: Desk/AFP/Getty Images

For more than two years, markets have priced in a lot less monetary tightening than was signaled by the Federal Reserve’s “blue dots,” which represent the expectations of individual members of the Open Market Committee for the future path of interest rates.

The surprise election of Donald Trump is likely to affect this divergence for two distinct reasons, and the market implications are different depending on which of the two dominates in the months ahead.