Trump slams Fed’s rate cut decision

Following the half-percentage-point interest rate cut by the Federal Reserve less than two months before the November election, Republican presidential nominee Donald Trump is not holding back in his criticism of the institution.

In an interview with Newsmax on Thursday, the former president stated, “It really is a political move.” Adding that “Most people thought it was going to be half of that number, which probably would have been the right thing to do,” Trump stated. “So it’s a political move to try and keep somebody in office, but it’s not going to work because the inflation has been so bad.”

Trump used the same argument two days earlier, this time suggesting that the central bank might have manipulated politics to support the Democratic administration, which includes Vice President Kamala Harris, Trump’s competitor.

He added on Wednesday, saying that the larger cut was another indication of the economy’s weakness, which he attributes to the Biden-Harris government. At a bitcoin bar in Manhattan on Wednesday, Trump remarked, “I guess it shows the economy is very bad to cut it by that much assuming that they are not just playing politics.”

Powell, who was appointed Fed Chair by then-President Trump in 2018 but has frequently found himself at conflicts with him in recent years, dismissed on Wednesday the notion that the Fed was motivated by politics when it started its first rate cut since 2020.

“This is my fourth presidential election at the Fed, and it’s always the same,” Powell stated. “We’re always going into this meeting in particular and asking, ‘What’s the right thing to do for the people we serve?'”, adding that “We don’t put up any other filters.”

Powell also disagreed with the notion that a faltering economy was the reason behind the cut. Powell told reporters, “Our economy is strong overall,” and that the Fed’s decision to lower its benchmark rate by 50 basis points was really an attempt to make sure that “strength in the labor market can be maintained” in tandem with economic expansion.

In the days following the rate cut announcement, Democrats have also attempted to capitalize on the political advantage; some have even placed personal pressure on Powell. In fact, those on the left argued that the Fed chair waited too long to make the cut.

Sen. Elizabeth Warren responded to the news by writing, “This cut in interest rates is yet another acknowledgement that Powell waited too long to reduce rates,” yet she also expressed happiness that lower rates were finally in place. Warren reiterated on Wednesday that “more rate cuts are needed.” Warren had previously called for a 75 basis point reduction.

The decision, according to President Joe Biden, is “a signal we’ve entered a new phase of our economy and our recovery.” “Welcome news for Americans who have borne the brunt of high prices,” Harris continued in her own statement, “but my focus is on the work ahead to keep bringing prices down.”

Throughout the whole year of the campaign trail, Trump has been the Fed’s most vocal critic. In June, he stated to Bloomberg that making cuts is something “they know they shouldn’t be doing.” That followed Trump’s statement regarding cuts in a February Fox Business interview, saying, “I think Powell’s going to do something.”

Then, when he said that Powell had “gotten it wrong a lot” and that the president should “have a say” in Fed decisions, he raised eyebrows last month.

Trump foreshadowed this week’s criticism before the Fed took action. Trump said to a Michigan crowd on Tuesday night, “They’ll do the rate cut and all the political stuff,” before the announcement of the widely anticipated cut. He continued by saying that the fundamental explanation “is because the economy is not good, otherwise, you wouldn’t be able to do it.”