Fed Cuts Rates by a Quarter Point
American Conservative6 days
US Fed Cuts Rates, Markets Soar After Trump Victory
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Above: Jerome Powell, chairman of the US Federal Reserve, during a news conference on Nov. 7, 2024. Image copyright: Ting Shen/Contributor/Bloomberg via Getty Images
The Facts
The US Federal Reserve on Thursday unanimously approved a quarter-point interest rate cut, bringing the federal funds rate to a range between 4.5% and 4.75%, following Tuesday's reelection of former Pres. Donald Trump.
The reduction is a smaller move compared to September's half-point cut, as the Federal Reserve is seeking to maintain economic strength while keeping inflation on track to meet its 2% target. Over the summer, the Fed started this process by raising the rate to a range of 5.25% to 5.5% — a 23-year high.
The Spin
Republican narrative
All it took was for Trump to get reelected to get America back on a positive roll. In addition to the Fed's interest rate cut, major manufacturers announced they're bringing jobs back to the US and China announced it wants to have better relations. In addition, numerous warring parties overseas have announced a desire for peace. This a strong start to what will be an even stronger term.
Democratic narrative
This announcement is being falsely accredited to Trump's reelection. This cut was made possible because inflation significantly cooled under the Biden administration. But there's a softening job market, and if Trump goes through with some of his promised economic policies another rate cut may not come, or worse, the economy could head in the opposite direction.
