FOMC Meeting and US Elections!đ§đ€ đ
On Wednesday, Republican Sen. Tommy Tuberville of Alabama criticized the Federal Reserve's decision as "shamelessly political," claiming it was aimed at benefiting Vice President Kamala Harris. While a rate cut could potentially help her, itâs uncertain if voters will be influenced by changes that take time to impact the economy.
âIt wonât significantly affect the economy before Election Day,â economist Jason Furman told CNN, noting that markets had already anticipated the cut, and its effects on unemployment, GDP, or inflation would take months to materialize.
Former President Donald Trump, during a visit to a bitcoin-themed bar in New York, commented, "It either shows the economy is very bad, or they're playing politics, one or the other."
While the Fed often cuts rates during economic downturns, as seen during the pandemic, this move is more about easing financial constraints rather than stimulating growth.
Interestingly, Fed Chair Jerome Powell, appointed by Trump and reappointed by President Biden, has built a reputation for staying above political disputes. Despite being a registered Republican with a background in private equity, Powell steers clear of partisan comments, as he demonstrated again on Wednesday when asked whether the rate cut was politically motivated, responding with a tone of frustration.
