Analysis: After the midterm elections, the Federal Reserve's focus will shift to controlling inflation; if the conflict in Iran ends, there will be no need for another interest rate hike

Some observers of the Federal Reserve believe that Trump's strong opposition from voters in the midterm elections may alleviate the political pressure faced by Federal Reserve Chair Waller, allowing him to reduce political interference and focus on controlling inflation. Voters have listed the cost of living as one of their top concerns, fundamentally changing the political landscape surrounding the Federal Reserve.

Since Trump's re-election in 2024, he has been exerting pressure on the Federal Reserve and its interest rate decisions, repeatedly calling for rate cuts, supporting an unprecedented criminal investigation into the renovation of the Federal Reserve's office building, and attempting to remove a sitting Federal Reserve governor. Against this backdrop, Trump chose Waller to lead the Federal Reserve in May of this year, after Waller had unusually shifted to support rate cuts. This has raised concerns among Democrats, who fear that the new chair may have agreed to adjust monetary policy according to the president's wishes.

Claudia Sahm, Chief Economist at New Century Advisors, stated that in fact, if the election results prompt Trump to end the conflict with Iran and abandon further tariff increases, the Federal Reserve may not need to raise interest rates again at all.