Former President Donald Trump suggested Wednesday the Federal Reserve’s decision to cut interest rates by half a point could be politically motivated.
When asked during a campaign stop in New York City for his reaction to the interest rate cut, Trump said it reflects either “the economy is very bad” or the Fed is “playing politics” with how it sets interest rates.
“I guess it shows the economy is very bad to cut it by that much, assuming they’re not just playing politics. The economy would be very bad or they’re playing politics, one or the other. But it was a big cut,” Trump said.
While the timing of the cut could seem like the Fed is assisting Vice President Kamala Harris’ bid for the White House by easing the financial burdens Americans are currently shouldering right before they cast their votes, the central bank makes its decisions irrespective of the political calendar.
“We never use our tools to support or oppose a political party, a politician, or any political outcome,” Fed Chair Jerome Powell told reporters in July, following the central bank’s decision to leave interest rates unchanged.
Even Kevin Hassett, who served as Chairman of the Council of Economic Advisers when Trump was president, said in a PBS News interview last week, “There’s been a whole bunch of bad data coming out and I think that a prudent Fed would start to risk manage by cutting rates now.”
“It’s unfortunate that it’s before an election because of the appearance of partisanship,” said Hassett, who has been floated as Trump’s potential pick for Fed chair if he wins the election.
He previously said it would be a “big mistake” for the Fed to cut before the election but said that he’s since changed his views on that because of the worsening economic conditions.