U.S. Federal Reserve Chair Jerome Powell said on Wednesday political considerations play no part in either near-term monetary policy deliberations or the...
U.S. Federal Reserve Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington - U.S. Federal Reserve Chair Jerome Powell said on Wednesday political considerations play no part in either near-term monetary policy deliberations or the central bank's longer-run forecasting work.
If the Fed cuts rates in September, it would likely set the central bank up for criticism from Republican presidential contender Donald Trump. When he was last in office, the former president was a sharp critic of the Fed and Powell. In a recent Bloomberg Businessweek interview, he said a pre-election rate cut is "something that they know they shouldn’t be doing,” presumably because easier borrowing conditions might favor his presumptive Democratic opponent, Kamala Harris.
While it's possible to "run simple simulations of different potential policies" a government might pursue, changing actual Fed policy to reflect these types of shifts is "a line we would never cross," Powell said, adding "we don't want to be involved in politics in any way, so we wouldn't do that." Derek Tang, an analyst at LHMeyer, a forecasting firm, is skeptical the Fed can shrug off politics' impact on forecasts.
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