Will He Threaten To Put Jerome Powell In Prison?
Senate Democrats let the Republicans railroad them on a border security bill and wound up voting for a far more narrow-minded, conservative bill than they felt comfortable with. But then Trump butted in and demanded his sycophants turn it down to deprive Biden of a big legislative win. Now Republicans are being pounded with ads— like this one by Kirsten Engel in Arizona— denouncing their cowardice. Republicans are in an awkward position over that right now and they are not eager to see Trump trying to do something similar to them in regard to interest rates.
Trump is whining and fuming that the Fed better not dare lower interest rates before the election— something the European Central Bank has already done twice (yesterday being the second rate cut) and the Fed is on the verge of doing here. Jasper Goodman and Eleanor Mueller wrote that Señor T “is on a collision course with his fellow Republicans on Capitol Hill over Federal Reserve policy, with a clash looming next week when the central bank cuts interest rates. The former president has warned that rate cuts are ‘something that they know they shouldn’t be doing’ before the November elections. The Fed move, its first reduction in borrowing costs in four years, will begin to provide relief to a job market that’s showing signs of weakening. With economic fears rising, some of Trump’s allies on Capitol Hill aren’t echoing his warning to the Fed about election interference and instead say it’s the right call to lower rates. Many GOP lawmakers said in interviews this week that the Fed should act because of worrying indicators that the economy could be slowing down.”
The Fed is a year late and should be eon their 3rd cut now, not their first. They should cut by a half point now, not the quarter point they’re looking at. Louisiana Republican John Kennedy agrees and noted that “It is time for a rate cut. This economy— particularly the labor market— is softening very, very, very quickly.”
GOP lawmakers’ support for the cut signals that they’re willing to give the Fed room to drive decision-making on monetary policy, despite Trump’s stated desire to have more say over it. Next week’s move by Fed Chair Jerome Powell and his colleagues could become a flash point over the independence of the central bank and provide an early window into how Republicans would respond to Trump’s attempts to pressure the Fed if he’s reelected.
“The time is right,” said GOP Rep. Dan Meuser, a Trump supporter from the battleground state of Pennsylvania. “You’ve got to put the greater good ahead of looking political.”
Trump has a long history of accusing the Fed of conspiring against him. He said then-Fed Chair Janet Yellen kept rates low in 2016 to boost Democrats. Trump has said he expects Powell to do the same this year. Powell, a Republican, was a frequent target of Trump’s criticism during his presidency despite being his hand-picked Fed chair.
While some GOP lawmakers have followed Trump’s lead, recent economic indicators appear to be a driving concern for others. Unlike Trump, Republicans in Congress currently hold office and could be held responsible by voters for a downturn.
“When you think about it, a rate cut is a cost cut,” Meuser said. “It’s a stimulus to the economy, it’s something that’s needed. It’s a pro-growth initiative.”
The Fed is facing new pressure to cut rates because of growing concerns about a potential spike in unemployment. Coupled with mounting evidence that Covid-era inflation is tamped down, it’s all but assured that the Fed will ease borrowing costs next week. The big question is by what magnitude it will begin to change course. The Fed raised rates 11 times in 2022 and 2023 to bring down rapid price increases.
…The disconnect between Trump and fellow Republicans on the Fed reveals uncoordinated messaging on the state of the economy. The forces compelling the Fed to cut are signs that the economy is softening under President Joe Biden, which is how GOP lawmakers are choosing to frame the issue as they back the decision to lower rates.
Once again, Trump is showing the American people he cares NOTHING for them and only himself and looks at government as a tool to advance his own personal agenda, not their families’ well-being. That’s who he is; that’s who he’s always been and will always be.
And for anyone who hasn’t been following this debate over rates, progressives like Elizabeth Warren and Pramila Jayapal have been urging Powell to start cutting all year because they’ve been worried that high interest rates hurt working-class and middle-class Americans by increasing the cost of borrowing for everyday expenses like mortgages, car loans and credit cards. It was obvious that the Fed's aggressive interest rate hikes was slowing growth and could trigger a recession, leading to reduced hiring, layoffs and ending wage growth.
Unlike conservatives, progressives see interest rate cuts as a tool to reduce inequality. High interest rates benefit wealthier individuals who have significant savings, while low-income households, who rely on borrowing to make ends meet, are hurt by rising rates. Cutting interest rates stimulate business investment, which leads to job creation. Progressives emphasize the need to grow the economy from the bottom up by fostering an environment where businesses, particularly small and medium-sized enterprises, can expand and hire more workers, reducing unemployment and improving wages, especially for low-wage workers. Lower interest rates also make it cheaper for the federal government to borrow, allowing for more government spending on infrastructure, healthcare, education and green energy initiatives without significantly increasing the cost of servicing the national debt.
Prioritizing inflation over unemployment leads to policies that hurt ordinary people. By pushing for rate cuts, progressives are advocating for a broader mandate that includes full employment and economic equity rather than focusing narrowly on price stability. Progressives see lower interest rates as a tool to achieve economic growth that is more inclusive, equitable, and sustainable, particularly in the face of inflationary fears and recession risks.
The republicans will likely fold and bow to the Orange A-hole once again. He’s all they’ve got. Who knows if the government will shut down, too, something he’d also love as rretribution. TFG and the whole Republican Party do NOT care one whit about our country or people. If they follow TFGs lead they may well insure Kamala wins.