The Federal Reserve’s expected move Wednesday to cut interest rates amid a humming U.S. economy marks a clash with historical policy and brings with it potentially new dangers.
and his appointed chairman, Jerome H. Powell, out of fear that a slowdown could hurt his chances of winning reelection next year.Powell and other Fed officials have pushed back on criticism that they are bowing to the president’s demands, insisting that their policy decisions are independent from political influence and will be based on economic data.
Shortly afterward Powell will provide further guidance on monetary policy and the Fed’s latest thinking during a news conference with reporters. Yet U.S. economic fundamentals have remained solid during that period. While growth has slowed from about 3% last year and through the first quarter, that was expected. Among other things, stimulus from the big tax cut that passed in late 2017 began to fade.
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