President Joe Biden praised the freedom of the U.S. central bank in a speech on Thursday, after the Federal Reserve lowered interest rates. He also criticized Republican nominee Donald Trump’s stated desire to have more power over the Fed.
Biden also talked about how important the rate cut was, but he made it clear that his government is still working to fight inflation, just like White House officials told him they would.
In a speech at the Economic Club of Washington, D.C., Biden said, “Unlike my predecessor, I respect the Federal Reserve’s independence.” “Being free has been good for the country.” In case you were wondering, I haven’t talked to the head of the Fed once since I became president. If we ever lost that independence, it would also be very bad for our business.
If people vote to keep him in office, Trump said last month that the Federal Reserve has “gotten it wrong a lot” and that he should have a bigger say in what the bank does. Some people who support Trump have also put forward plans to weaken the central bank’s independence.
Meanwhile, Democratic presidential nominee Kamala Harris thinks the Fed should make decisions independent of the president and Trump, a Harris aide told MarketWatch last month. He took Biden’s place at the top of the Democratic ticket when the president dropped out of the race for president in July.
Biden said in his speech on Thursday that the Fed’s rate cut on Wednesday was “an important signal” that inflation has gone back down after multiple rate hikes to reduce it. He also said that the central bank has “switched to lowering rates to keep the country growing.”
Biden also said, “I’m not here to take a victory lap.” “We need to do more work.”
When White House officials talked about what the president was going to say, they said similar things.
President Biden will talk about a new milestone: unemployment, wages, and GDP are all going up while inflation and interest rates are dropping. Biden’s chief of staff, Jeff Zients, told reporters about the speech.
“First, I want to make it clear: this is not a victory speech,” Zients said. “It’s meant to be a statement of progress—a lot of progress.” To mark this important time for the country, the president says, “Let’s look at how far we’ve come and how much work we still need to do.”
Lael Brainard, who is Biden’s top economic adviser, said that the actions of the U.S. central bank “send a clear signal that inflation has come back down, interest rates are coming down, and the focus now is on keeping the important gains on employment and income in place.”
Trump had a different opinion about the 0.5 percentage point rate cut. He said that the Fed might be getting political before the elections in November.
The former president told reporters Wednesday, “I guess it shows the economy is very bad to cut it by that much, if they’re not just getting political.” Either the economy would be very bad or they are getting political. It was a big cut, though.
For Americans who have been struggling with high prices, Harris said the Fed’s news was “welcome news.” She then quickly went on to talk about what she would do as president to lower prices.
U.S. stocks SPX 0.14% The DJIA -0.00% COMP 0.51% ended the day down after trade was bumpy after the Federal Reserve decided to cut its key interest rate by 50 basis points. This was an aggressive start to the Fed’s monetary-easing cycle. The key stock market benchmarks were trading sharply higher on Thursday.
