US Private Equity Firm Carlyle Founder: "Fed Will Not Cut Interest Rates Before Election"

David Rubenstein
"Lowering Interest Rates Before the Presidential Election Will Cause Major Political Turmoil"

David Rubenstein, co-founder of the U.S. private equity firm Carlyle Group, predicted that the U.S. Federal Reserve (Fed) will not cut interest rates before the U.S. presidential election in November.

Rubenstein appeared on CNBC on the 24th (local time) and stated, "Generally, the Fed wants to keep a distance from politics."

He said, "The Fed has said it will not lower rates before the election. If it does so beforehand, it would cause significant political turmoil."

Rubenstein believes the Fed is fully aware that cutting rates before the election would expose it to strong criticism from former President Donald Trump.

However, some in the market have raised conflicting forecasts that the Fed might cut rates at the September FOMC meeting, the last one before the November election.

Earlier, the Fed reduced its forecast for the number of rate cuts this year from three to one at this month's Federal Open Market Committee (FOMC) meeting. The market expects one to two cuts within the year. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market currently reflects a 67.7% probability that the Fed will cut rates by at least 0.25 percentage points at the September FOMC meeting. The probability of a 0.25 percentage point or greater cut in November is 79.8%.