LARRY KUDLOW: Mr. Trump is a better forecaster than all of the Fed's economists put together

Core Viewpoint - The Federal Reserve has reduced its target rate by 175 basis points over the past year, currently standing at 3.5% to 3.75% [1] Group 1: Federal Reserve Actions - In the latest meeting, there were three dissenting votes regarding the rate cut, with one member advocating for a half-point cut and another opposing any cut [2] - Following the Fed's decision, stock markets surged, with the Dow increasing by nearly 500 points and the S&P 500 approaching a new high, while bond yields, including the 10-year yield, fell by 3.5 basis points [2] Group 2: Economic Projections - The Fed's economic projections for the next year have been adjusted to a modest 2.3%, declining to 1.8% in subsequent years, while inflation is expected to gradually approach 2% [4] - Current GDP growth estimates are considered inadequate, with a suggested potential growth rate of 3% to 4% instead of the projected 1.8% [4] Group 3: Impact of AI and Energy Prices - Combining productivity growth of 2.1% and labor force growth of 1.3% suggests a real GDP growth of 3.4%, with the potential for AI advancements to further enhance these figures [5] - The drop in oil prices from $80 to $60 this year (a 25% decrease) has not yet significantly impacted the Consumer Price Index (CPI), but it is anticipated to contribute to lower inflation, which could support higher real GDP growth [6]