"0.25%P Is Correct... For Someone"
Former U.S. President Donald Trump claimed that the Federal Reserve's (Fed) 'big cut' (0.5 percentage point interest rate cut) was a 'political move.'
On the 19th (local time), in an interview with the American conservative media Newsmax, former President Trump said, "In some ways, a rate cut is necessary because the economy is sluggish," but added, "In other ways, it is really a political move."
Earlier in July, former President Trump stated in an interview with Bloomberg Businessweek that the Fed should not lower interest rates before the presidential election. He argued that lowering rates to stimulate the economy could favor Democratic vice presidential candidate Kamala Harris.
However, in this interview, former President Trump said that a 0.25 percentage point cut was necessary. Regarding the 0.5 percentage point cut, he said, "I thought most of it would be half of that (0.25 percentage points), and maybe that would have been the right thing."
He went on to say about the rate cut the previous day, "It is a political move to keep someone in office, but inflation is too severe, so it will have no effect." Although he did not mention any names specifically, he claimed that the Fed's big cut ahead of the election was a political move in favor of the Democrats.
Former President Trump criticized the Fed, saying, "They missed inflation," and pointed out, "They lowered rates too early now, and before, they were too late." He added, "But inflation is already over. It caused tremendous damage to people, and prices have not fallen."
The Fed lowered the benchmark interest rate by 0.50 percentage points from 5.25?5.50% to 4.75?5.00% the previous day. Fed Chair Jerome Powell stated that political matters such as the election are unrelated to interest rate decisions. At a press conference the day before, he emphasized, "The Fed works for all Americans," and "We do not serve any politician, any cause, or any issue."
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