Why Trump thinks the Fed should avoid cutting interest rates before the November election?

The main reason is that political considerations are more important. In addition, the general election is fierce. Cutting interest rates before the election will bring more advantages to the Biden administration. They will vigorously pursue it. The probability of cutting interest rates in September has exceeded 90%.

1. Prevent political advantages for Biden: Trump warned that if the Federal Reserve cuts interest rates before the election, it may give current President Biden an economic boost. That means a rate cut could improve economic conditions, helping Biden's campaign.

2. Political considerations: Trump hopes to maintain the current economic status so that he can better criticize the economic policies of the current government during the election campaign.

3. Economic strategy: "Trumponomics", which he equates to "low interest rates and taxes." That suggests he may want to implement rate cuts during his likely next term, rather than letting the current government benefit from them.

4. Long-term economic planning: Trump expressed his hope to reduce the corporate tax rate from the current 21% to 15%. This tax policy is closely linked to monetary policy (such as interest rates), which he may wish to coordinate in his economic plans.

5. Consideration of inflation: Considering the current economic environment, cutting interest rates prematurely may stimulate inflation. This may be another reason why Trump opposes cutting interest rates before the election. After Trump comes to power, the market’s expectations for continued increase in inflation have also increased. .

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