Goldman Sachs warns: If Trump comes to power, the Fed may cut interest rates an additional five times

Goldman Sachs chief economist Jan Hatzius said that the tariff plan proposed by former US President Trump may lead to an additional five interest rate cuts by the Federal Reserve.

Hatzius outlined the impact of Trump's proposal to impose a 10% tariff on all imports at the European Central Bank's annual meeting in Sintra, Portugal. He then assumed that all other countries would raise tariffs in retaliation, and the subsequent trade war would increase trade policy uncertainty to the peak level of Trump's first presidency.

Hatzius said this would increase US inflation by 1.1 percentage points, and European inflation would only rise modestly by 0.1 percentage points.