In a set of file photos, U.S. Vice President Kamala Harris is seen in Milwaukee, Wisconsin, U.S., on August 20, 2024, and former U.S. President Donald Trump is seen in Bay Area, New Jersey, U.S., on August 15, 2024. Deminster.
Marco Bello | Gina Moon | Reuters
Fed Chair Jerome Powell Suggesting higher-than-expected gains on Wednesday interest rate Cuts likely to have limited impact on presidential race between VPs Kamala Harris and Donald Trumpas the impact of the decision will slowly ripple through the economy.
“What we’re doing does have a lag to a large extent on the state of the economy,” Powell said in response to a reporter’s question about the timing of the long-awaited rate cut at a news conference, just 48 days before the Nov. 5 election. .
Fed The decision to slash interest rates by 50 basis points, or half a percentage point, was announced on Wednesday, the first rate cut since March 2020. american economyPost-pandemic recovery.
Although promotion is in the final sprint stage Trump-Harris Powell said the Fed focused on consumer interests when making decisions without “any other filter.”
“This is my fourth term as Fed chairman, and it’s the same every election,” Powell said. “We always come to this meeting specifically and ask what’s right for the people we serve. matter.”
Federal Reserve Chairman Powell held a press conference after a two-day interest rate policy meeting in Washington, USA, on September 18, 2024.
Tom Brenner | Reuters
Despite the Fed’s efforts to separate its highly anticipated decision from the political context, the rate cut announcement soon turned into a political football.
The Biden administration viewed the rate cut announcement as a victory for the president’s economic agenda.
“We’ve just reached an important point: inflation and interest rates are falling and the economy remains strong,” President Joe Biden he wrote in an X post after the announcement. “Critics say it can’t happen – but our policies are reducing costs and creating jobs.”
The Harris campaign used the rate cut as an opportunity to double down on the Democratic presidential candidate’s economic platform.
“While this news is good news for Americans hurt by high prices, my focus is on the work ahead to continue lowering prices,” Harris wrote in a statement Wednesday.
At the same time, Trump turned the rate cut into an attack on the economic record of the Biden-Harris administration. He also said the Fed may be politically motivated.
“I think if they’re not just playing politics, to cut that much money is a sign that the economy is in very bad shape,” Trump said during a surprise visit to a Bitcoin-themed bar in New York. “That’s a big cut.”
During his first term, Trump frequently criticized Powell, breaking with White House tradition of not commenting on Fed actions that help the agency maintain its political independence. During his re-election campaign, Trump explain He believes the president should have official input into the Fed’s decisions.
Both Harris and Trump are trying to position themselves as the top candidates for the health of the U.S. economy, as voters repeatedly list the high cost of living as a top issue in national polls.
After the outbreak, inflation surged to its highest level in 40 years, making groceries, housing, gas and other daily costs more expensive for American consumers. In order to cool down the economy, the Federal Reserve began to raise interest rates in March 2022, further squeezing consumer budgets.
The economic pain has made high prices a top concern among voters this election cycle, making them a major focus of both Democratic and Republican campaigns.
