Dem
51
GOP
49
Fed Chair Jerome Powell appears ready to cut interest rates. That would make loans to consumers and businesses cheaper, although it would punish savers, especially older people. Powell would do this only if he felt that inflation was no longer a threat. If he made the cut, there would be news stories everywhere that inflation is over. This would undercut one of the core arguments of Donald Trump and the Republicans, namely that inflation is rampant. They certainly don't want a Trump appointee to be out there saying "inflation has been beaten. We can go back to normal now."
Trump is trying to head off the cuts (even though low interest rates help the real estate industry) by claiming that due to an impending election, the Fed shouldn't do anything. But the Fed is not allowed to take politics into account when making a decision. If Powell were to hold off on cutting rates to help Trump, that would make the Fed just another political agency, like the FCC and the Supreme Court. Powell knows that and will strongly resist the influence of politics.
Yesterday, Powell said that he might cut interest rates as soon as September 17, when the board next meets. The Fed's preferred measure of inflation is close to its target of 2%, so mission accomplished. The Fed pulled off a soft landing. It killed inflation without causing a recession. If Trump were smart, he would take credit for appointing such an economic genius to run the Fed, but he probably won't.
This would be perfect timing for Harris. Just as the campaign is getting in full swing and people are paying attention, she can say that inflation is over and prices won't go up by much anymore. (V)