Fed on track to raise US rates next months as officials shrug off Trump’s election win

Federal Reserve policy makers never discuss politics in their meetings, according to a senior official, while his colleague said the election of Donald Trump as US president shouldn’t delay an interest-rate increase next month.

“I am not seeing enough volatility here to change my basic projection for the economy,” said Federal Reserve Bank of St. Louis President James Bullard on Thursday. “I think we are basically on track, the same way we were before the election. Our view has called for a single rate increase and I think December would be a reasonable time to implement that increase.”

Republican Trump’s shock victory on November 8 initially sent stock markets plunging, though equity prices have recovered and bond yields risen in anticipation of the tax cuts and infrastructure investment he promised voters.

Investors currently see an 84 per cent probability of a quarter percentage point hike at their December 13-14 meeting, according to pricing in federal funds futures.

Trump criticised the Fed during his campaign. Questions remain, however, over his attitude toward Fed independence and Chair Janet Yellen, whom he accused of holding rates low to aid Democratic President Barack Obama. Fed officials stressed the institution is apolitical.