Vice President JD Vance is questioning whether Federal Reserve Chairman Jerome Powell stopped lowering interest rates because returned to the presidency.
In a posting on X, Vance wrote: “I’d love to hear an argument for why Powell cut rates 50 points right before an election but can’t do it now with inflation lower.” Vance’s comments echoed earlier remarks by Trump that Powell used his position to boost the Kamala Harris presidential economy by seeking to strengthen the economy ahead of last November’s election.
The question of the timing of 2024’s rate cuts was not raised when Powell appeared yesterday before a House Financial Services Committee hearing. Indeed, no Republican on that committee followed the Trump lead by making disparaging remarks about Powell directly to his face, despite the president’s request that “Congress really works this very dumb, hardheaded person, over.”
For his part, the central bank chief asserted there was no timeline on when or if the next rate cuts occur.
“If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn’t want to point to a particular meeting,” Powell said.
Vance had previously raised doubts about Powell’s objectivity, posting on X earlier this month, “The president has been saying this for a while, but it’s even more clear: the refusal by the Fed to cut rates is monetary malpractice.” Powell has also been repeatedly criticized by Federal Housing Finance Agency Director Bill Pulte, while Commerce Secretary Howard Lutnick weighed in on Powell’s performance last Friday.
Photo: Thomas Hawk / Flickr Creative Commons
Powell is smart enough to know that proposed tariffs can trigger inflation, even if the administration hasn’t figured that out or is hiding the truth. That’s why he’s hesitant.
No, he’s not smart enough to know that. The tariffs have not triggered inflation. What has triggered inflation was the enormous amount of money that Biden put into the system when he first took office. So far the tariffs have generated billions of dollars in revenue to the US. The most money coming from China. Inflation is currently below 2% and has been there since Trump became president. The truth behind Powell’s refusal to lower rates is simply that he just doesn’t like Trump and doesn’t want him to look good, so maybe he’ll look bad in the mid terms. This behavior is a political stance and it is causing monetary damage to the country. We are currently losing billions because the rates are not being lowered. They should’ve been lowered already.
Trump spent 7 trillion dollars in 2020, Biden spent 2.5 Trillion in response to Covid which saved the economy but did cause massive inflation. In 20/20 unemployment checks and PPP created wealth I have never seen before so much that everyone was buying cryptocurrency and real estate so you are quite uninformed and biased politically which will bury you financially with that limited perspective
Interest charges are a double edged sword. On the one hand higher interest rates impact borrowers negatively. On the other hand lower interest rates impact people whose funds are invested in annuities, bonds and CDs negatively with the latter consisting of a high percentage of people who have lost spouses, parents and/or are retirees. Which group do you prefer to hurt?
If the current administration would govern in a rational way, lowering interest rates would probably be happening. His tariff obsession along with his deportation obsession adds too much uncertainty into our lives and upends business planning.
We are being governed by the F team.
I don’t believe lowering interest rates is going to accomplish the objective of increased consumer spending. I’m a Realtor and the last time rates were lowered, there was increased demand and a shortage of housing. This resulted in higher prices for homes and extended delays with new construction. Lowering rates might help Mr. Pulte as a Builder, but it will have the effect of hurting consumers with higher prices. When you combine this with the Administration mass deportation policy, where are they going to find the labor to complete the houses?
Nobody is going to leave a 3% rate for the current rate. As a Realtor you should know this. Lower the rates. Get the real estate industry moving again. To worry about building because of a labor shortage? Builders would be happy to have that problem. Nobody is buying new homes at 6.5%+
1000% right. The rates are at the long time average. They are not high at all. They had rates too low for too long and then covid lockdowns ruined production causing inflation that has to come down. Do not lower the rates until the prices come down. Pulte is not a high end builder, they have plenty of room to drop their prices. They just want you to be able to afford a payment on an overpriced product.
These are all really amazing points to consider. In our market, listings are dying on the vine above $500K. Buyer’s remorse is really high and cancellations are up on both the buyer and listing sides. Even if we get a rate cut, it doesn’t mean we will see a reduction in mortgage interest rates because it seems like the banks are holding their rates to make up for the losses in new mortgages. I can’t compete with the more intelligent opinions above, but in our market if the mortgage rates don’t get under 6%, sellers prices will have to come down, inventory is already back to our normal rate and we are going into fall/winter market which is our slowest time of year. I’m a 22 yr veteran of this industry, now a broker/owner, and finding it difficult to navigate in this stale mate we are experiencing between buyers and sellers.
Powell and the democrats are putting their party over their Country.
They don’t want anything to improve under President Trump. This is just the same old politics and the reason the Popular vote, Electoral vote and all seven Swing States went to Trump. That kind of a Landslide Victory doesn’t happen by accident.
Powell is a staunch republican appointed by Trump during his first term.
Because inflation is way high. DROP THE PRICES. The rates are not high.