If the Fed is fortunate, dialing back its past rate increases will allow the economy to continue growing steadily with the unemployment rate leveling off at a historically low level and inflation grinding back to the central bank’s 2% goal.

The Fed lowered rates by 25 basis points to a 20-month low, but economists say tariffs may throw a wrench in the rate cutting cycle.

Prospects of a near-term rebound in the $28-trillion U.S. government bond market are faltering, as Donald Trump’s return to the White House is expected to usher in fiscally expansive policies that could temper the extent of the Federal Reserve's future rate cuts.