Fed heads into December meeting with new president-elect, same economic concerns 

Inflation is higher than it was in 2016, and the Fed is just at the beginning of its rate-cutting cycle

article-image

President Donald Trump | lev radin/Shutterstock modified by Blockworks

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


You may be experiencing some déjà vu. But for the Fed, 2024 is very different from 2016. 

While our president-elect and his ambitious economic plans (tax cuts, tariffs, stricter immigration policies) are the same today as they were eight years ago, the economy is in a vastly different place. Last week’s election results may have come too late for committee members to consider them in their interest rate decision, but there is still one more meeting before the end of the year. 

Back in December 2016 (roughly six weeks after Donald Trump was elected for his first term), the FOMC, as expected, raised interest rates for the first time in a year. What came as more of a surprise was that committee members — including current Fed Chair Jerome Powell — went on to increase the pace of rate hikes for the following year. 

“Many participants noted that the effects on the economy of such policy changes, if implemented, would likely be partially offset by tighter financial conditions, including higher longer-term interest rates and a strengthening of the dollar,” according to minutes from the FOMC’s December 2016 meeting.

Inflation is higher than it was in 2016, and the Fed is just at the beginning of its rate-cutting cycle. The labor market is in a precarious position, one that could be disrupted by Trump’s mass deportation plans. Prices on goods and services are easing, but higher tariffs pose a threat. 

We’ll get some Fed speak this week that could shed some light on the central bank’s plans. The next policy-setting meeting is slated for Dec. 17-18.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Flashnote Template (41).png

Research

We believe that few tokens at the application layer are diverging more from fundamentals than ZORA. Its fully-diluted P/S sits at 90x, pricing significant growth despite a consistent decline in weekly revenues since late July. We foresee an 80% decrease in protocol net margins due to a recent update to the fee structure that reduces trading fees from 3% to 1%, while boosting creators’ portion of the fee split. ZORA’s supply overhang also represents a near-term headwind, with 45% of ZORA’s supply (4.5B tokens or $350M at current prices) earmarked for the team & investors beginning to unlock on October 23, 2025 (36-month linear vesting schedule).

article-image

Insiders have the best information — markets should be willing to pay for it

article-image

The CFTC-regulated exchange is opening doors to crypto builders and traders through grants, partnerships, and new deposit options

by Blockworks /
article-image

DFS tells banking organizations to integrate blockchain monitoring tools to curb money laundering and sanctions risks

by Blockworks /
article-image

New short and long-term priorities include L1 gas boosts, ZK-EVMs, privacy reads, and a lean, quantum-resistant Ethereum

by Blockworks /
article-image

The new stBTC token redistributes Bitcoin gas fees to users, creating liquid yield without inflation or lockups

by Blockworks /
article-image

The reserve will collect protocol revenues to back W token, alongside new yield and unlock schedule

by Blockworks /