Economists: “Fed’s rate cut will make Kamala Harris the 47th president of the U.S.”
The U.S. Federal Reserve (Fed) lowered its policy interest rate for the first time in four years, cutting it by 50 basis points to a range of 4.75-5.00%. This marked the Fed’s first rate cut in four years. Following the decision, U.S. media outlets reported on the implications of this move, with headlines such as “Fed’s Rate Cut Made Kamala Harris the 47th President of the U.S.”
The Fed ended a four-year period of tight monetary policy and made its first step towards the anticipated easing cycle by cutting the policy rate by 50 basis points. Following the decision, the media speculated on the potential political consequences, with some suggesting that the timing of the rate cut might bolster Kamala Harris’s presidential campaign.
“Fed Might Be Aiming to Strengthen Harris’s Campaign”
An article in The New York Times quoted hedge fund billionaire John Paulson, a supporter of Donald Trump, who stated that interest rates were still too high but that the Fed should have waited longer before cutting them. Paulson criticized the Fed for delaying the cut until 47 days before the election, raising questions about its motives. He implied that the timing of the cut might have been designed to support Harris’s campaign. Paulson added, “They should have waited until November. The Fed should stick to its traditions and remain independent of presidential politics.”
Meanwhile, Moody’s Analytics economist Mark Zandi told The Washington Post that the rate cut provided a “definite economic tailwind” for Harris’s campaign.
Forbes: A Development Harris Will Celebrate
Forbes described the Fed’s rate cut as one of the most significant recent developments. It suggested that while former President Donald Trump would disapprove of the decision, Kamala Harris would celebrate it.
What had happened?
Harris and Trump had previously clashed over the role of the Fed. Trump had argued that he should have a say in the Fed’s decision-making process, claiming he had better instincts than those at the Fed. However, he later retracted his position, stating that Fed officials were not obligated to listen to him.
