Powell downplays impact of rate cut on Trump-Harris presidential race
Federal Reserve Chair Jerome Powell suggested that Wednesday’s larger-than-expected interest rate cut may have a limited effect on the presidential race between Vice President Kamala Harris and Donald Trump, because the decision’s impacts will ripple into the economy slowly.
“The things that we do really affect economic conditions for the most part with a lag,” Powell said at his press conference, responding to a reporter’s question about timing of the long-awaited rate cut, just 48 days before the Nov. 5 election.
The Fed on Wednesday announced its decision to cut interest rates by an aggressive 50 basis points, or half a percentage point, its first cut since March 2020, marking a milestone in the U.S. economy’s post-pandemic recovery.
Though the cut comes in the final sprint of the Trump-Harris race, Powell said the Fed made its decision with a focus on consumer interests and without “any other filters.”
“This is my fourth presidential election at the Fed, and it’s always the same,” Powell said. “We’re always going into this meeting in particular and asking what’s the right thing to do for the people we serve.”