Donald Trump has commented on the Federal Reserve’s decision to cut its benchmark interest rate by half a percentage point, suggesting that it indicates a struggling US economy or political maneuvering by the central bank. Speaking at a Manhattan bitcoin bar, Trump stated that “the economy would be very bad, or they are playing politics, one or the other. But it was a big cut.”
This is not the first time Trump has criticized Federal chair Jay Powell or accused the independent central bank of acting politically. In previous interviews with Bloomberg News and Fox Business Network, he warned against interest rate cuts before the election and expressed his desire to replace Powell.
Despite nominating Powell for Fed chair in 2017, Trump consistently attacked him during his presidency for not lowering interest rates amid trade wars initiated by Trump himself. He even questioned whether Powell was a greater enemy to the US than Chinese President Xi Jinping.
Powell’s current term as chair is set to end in 2026 after being reappointed by President Joe Biden in 2021. He has stated his intention to serve out the remainder of his term.
Trump’s comments were made ahead of a campaign rally in Long Island and were met with response from his Democratic opponent Kamala Harris. Harris welcomed the rate cut as good news for Americans burdened by high prices but emphasized her focus on addressing price reductions as part of her presidential candidacy.
Opinion polls indicate that voters remain deeply concerned about inflation and living costs despite recent slowdowns in inflation rates. The FT-Michigan Ross poll found that four out of five voters cited price increases as one of their major financial stressors.
