The Fed's rate cut was a 'boon' for Harris' team
Supporters of Kamala Harris and Donald Trump found something they could agree on: the Federal Reserve's half-point interest rate cut this week. Political gifts for Harris.
“This is really a political move,” Trump said in an interview with Newsmax on Thursday. “Most people thought it would be half that number, and that was probably the right call.”
“So it's a political move to try to keep somebody in power, but it's not going to work because inflation is so bad,” Trump added.
Predictably, Trump's comments were met with horror. Establishment reporters clutching pearls They were stunned that the former president, for the second time in two days, suggested politics may have influenced the Fed's interest rate cut.
At the same time, political journalists What Trump says is true..
President Donald Trump and Federal Reserve Chairman Jerome Powell on November 2, 2017. (Official White House Photo by Andrea Hanks)
“The Federal Reserve's long-awaited interest rate cut could be a boon to Vice President Kamala Harris' campaign as the presidential election nears its final stages.” The Washington PostJeff Stein wrote:
Stein continues by quoting: Mark ZandiHarris, the Democratic chief economist at Moody's Analytics, praised the rate cut as a benefit to him.
“This is certainly an economic boost for the Harris team, as it's the first of a series of rate cuts,” Zandi told Stein. “It's not just symbolic, it's real. It's going to really support the economy.”
Biden was confused and he wasn't confused.
President Biden was not confused. Biden announced that the message the rate cut sent was that it was a sign of the health of the US economy and proof that inflation is a thing of the past. The fight to eradicate inflation may not be over yet, but Biden said it's nearly there.
“The Fed's rate cut is not a declaration of victory. It's a declaration of progress. It signals a new phase for our economy and our recovery,” Biden said in his speech Thursday. Washington DC Economic Club “I don't come to celebrate the victory. I don't come to say well done. I don't come to say there's still a lot of work to be done.”
But he, Confused about her relationship with Jerome PowellIn the same speech, Biden made the highly bizarre claim that he had not met with Powell since taking office. This is demonstrably untrue. There are photographs of Powell sitting next to Biden in the Oval Office and standing next to him in the White House press room. Biden appointed Powell to a second term as Federal Reserve Chairman, which almost certainly included a meeting with him.
President Joe Biden and Federal Reserve Chairman Jerome Powell meet in the Oval Office at the White House on May 31, 2022. (SAUL LOEB/AFP via Getty Images)
So, was Biden lying about his meeting with Powell? Or did he misremember? Watch the videoit certainly doesn't seem like a slip of the tongue.
Chair Jared Bernstein White House Council of Economic AdvisersBiden tried to do damage control. According to Bernstein, what Biden meant was that he never discussed interest rates with Powell. This was intended as a contrast with Trump, who apparently thought he met with Powell in secret to press him on interest rates. In reality, Trump's criticism of Fed policy was very public, through tweets and media interviews.
In other words, Biden was trying to use the analogy that President Trump is a threat to the Fed's independence, even though President Trump has always made it clear that the president should have the right to speak publicly about monetary policy. He has no intention of interfering with the Fed..
“I'm not excited about it,” Trump said in an interview with CNBC's Joe Curnen in 2018. “Because when interest rates go up, they want to go up again. I'm really not happy about that. But at the same time, I'm letting them do what they think is best.”
Harris still gives weird answers about the economy
While Biden and Zandi welcomed the Fed's move, Harris is more cautious.Ms. Harris, who rarely answers questions from reporters and tends to make vague, hyperbolic statements when pressed on the economy, called the Fed's rate cut “welcome news” but stuck to her message that prices are too high.
“I know prices are still too high for many middle class and working families,” Harris said in a statement. “As President, my top priority will be lowering the costs of everyday life, like health care, housing and groceries.”
The political problem for Harris is that the Biden administration's repeated declarations that inflation is a temporary problem that's over have soured public opinion of Biden. Harris wants to avoid ringing the victory bell They worry that mentioning inflation again would give the impression that they are out of touch with economic reality.
Avoiding that impression will be a top priority for Harris, and a tough task. She doesn't understand economic realities.She claims that “price gouging” was responsible for the rise in food prices during her vice presidency, a claim that only 2% of economists surveyed in a recent poll by the University of Chicago Booth School of Business found plausible. 88% of the Booth School of Business panel of economists said they strongly agreed or agreed that her price controls, an anti-inflation measure, would create “substantial economic distortions.”
That doesn't mean the economists in these polls are necessarily right — they almost all believe tariffs will be passed on to consumers in the form of higher prices, something that didn't happen during the Trump tariff era — but at least Trump recognizes that he's at odds with the economic establishment when it comes to trade. Harris is floating in an isolated campaign bubble. It also protects her from opposition from mainstream economists who are more likely to support her candidacy.
Similarly, Harris has yet to come up with a coherent answer to the debate question, “Why don't people think they're better off now than they were four years ago?” As we've noted, The best explanation for this is that people aren't getting better. More so than during the pre-pandemic Trump era.
One reason this is a difficult question for Harris is Members of her own party feel pretty bad about how the economy has affected them.When Democrats are asked about the state of the economy overall, a majority (41%) say it is improving, but only 19% say their personal finances are better than they were a year ago, and only 36% say they expect their finances to be better a year from now.
