After the Fed cut interest rates, Trump angrily criticized: This is political manipulation!

The Fed's rate cut has already had an impact on the 2024 presidential election. Democrat Harris praised the move as good news for middle-class families, while Republican Trump hinted that the Fed's rate cut may be politically motivated. Fed Chairman Powell has promised not to let political pressure affect the central bank's decisions. With only seven weeks left until election day, the 2024 presidential election is about to begin. The opposing narratives also highlight how the economy and interest rates have quickly become a focal point of the election, with both parties trying to use this move to solidify their electoral positions. Former U.S. President Trump stated that the Fed's decision to cut the benchmark interest rate by 50 basis points indicates that the U.S. economy is "very bad" or that the Fed is "playing politics." The Republican presidential candidate said in an interview with reporters, "I think if they're not playing politics, such a large rate cut indicates that the economy is very bad. Either the economy is bad, or they are playing politics, one of the two. But this is a big rate cut." Harris, in a statement, viewed this decision as "particularly welcome news for Americans burdened by high prices." Her statement exposed inflation as a significant political burden for her, as inflation severely impacts American families and disappoints voters in Biden's handling of the economy. "I know that for many middle-class and working families, prices are still too high. My top priority as president is to reduce the cost of everyday items such as healthcare, housing, and food," Harris added, attempting to contrast with Trump's agenda. Biden also praised the move as a "critical moment in fighting inflation." "Inflation and interest rates are falling, and the economy remains strong," he said in a statement. "Critics say this is impossible, but our policies are reducing costs and creating job opportunities." Biden said he would further discuss the matter on Thursday. Trump's latest intervention is not his first criticism of Powell or accusing the independent central bank of taking political action. In an interview with Bloomberg this summer, Trump warned Powell not to cut rates before the election, but said if he was re-elected for four more years, if Powell "did the right thing," he would let him continue as Fed chairman for the remainder of his term. In a February interview with Fox Business Channel, Trump said he wanted to replace Powell and accused him of being "political," predicting he would cut rates to "help the Democrats." Powell is widely respected on Wall Street for leading the Fed. He is a Republican who worked at the U.S. Treasury Department during the elder Bush administration, then moved to an investment bank, and later became a partner at Carlyle Group. Although Trump nominated Powell to be Fed chairman in 2017, during his tenure, Trump repeatedly attacked him for not lowering rates during the trade war he initiated at the time. At one point, Trump questioned whether the Fed chair was a greater enemy to the U.S. than others Supporters of Donald Trump also criticized the Federal Reserve for adjusting interest rates so close to the November election. Hedge fund billionaire John Paulson said he believes the Fed should "stay away from presidential politics". Paulson is a major donor to the Republican presidential candidate and could potentially become the future Treasury Secretary if Trump is re-elected. "Traditionally, the Fed does not cut rates so close to an election. The only time this century that this was done was after the 2008 financial crisis when decisive action was needed. We are not in a similar situation today," Paulson said in a statement. "This decision raises questions about whether the timing is aimed at boosting Vice President Harris's campaign. The Fed claims to be above politics, but the timing of today's action raises doubts about their statement." This criticism echoes Trump's own fierce attacks on the Fed and raises concerns that if Trump wins the election, he may intensify pressure on the Federal Reserve. Powell's current term as Fed Chair will end in 2026. He was reappointed by Biden in 2021, and Powell recently stated this summer that he intends to continue serving the remainder of his term. Trump previously accused the Fed of being against him and criticized then-Fed Chair Yellen in 2016 for keeping rates low during his presidential campaign against Democrat Hillary Clinton. In recent weeks, Trump has hinted that the president should have more say in the Fed's handling of interest rates and monetary policy, a move that would overturn the Fed's long-standing tradition of independence from political forces. However, Trump is not the only government official pressuring the Fed over interest rate decisions. Three prominent Democratic senators called on Powell to cut rates by 75 basis points this week. House Budget Committee Democratic leader and Pennsylvania Congressman Brendan Boyle said on Wednesday that the Fed's rate cut is a victory for the middle class and praised the Fed for making "significant progress on inflation". Polls show that despite a recent decline in inflation rates, most voters are still deeply concerned about inflation and the cost of living. The latest FT-Michigan Ross poll found that three-quarters of voters list rising prices as one of their biggest financial pressures