If Federal Reserve Chairman Jerome Powell does not immediately cut interest rates, he could clear the way for Donald Trump to win the presidency in 2024, claims top progressive lawmaker Rohit Khanna, the New York Post reports.
“Powell should cut interest rates now, given most of inflation was caused by supply shocks,” California Congressman Khanna posted on X Wednesday. “If he doesn’t, he may be the person most responsible for the possible return of Trump.”
Fed officials have signaled that rate cuts were conceivable in the coming year — but not until the fall, after the election.
The outspoken Khanna has repeatedly blasted Powell, despite the fact that the U.S. Federal Reserve is supposed to set monetary policies regardless of which party controls the White House.
Trump appointed Powell as chairman of the Fed in 2017, and Biden reappointed him in 2021, over the objections of many progressives.
The Fed has raised interest rates from near zero in 2021 through 11 rate increases to a two-decade high of 5.25% to 5.5% — but left rates unchanged at its last three meetings. The increases were aimed at reversing inflation, which peaked at a four-decade high of 9.2% in June 2022.
Inflation slowed to 3.1% in November, but is still above the Fed’s target rate of 2%.
Economists, Wall Street analysts and politicians are hoping the Fed can reduce interest rates through these rate hikes without causing a recession, otherwise known as a “soft landing.”
Trump is the current frontrunner for the Republican Party’s presidential ticket.
President Joe Biden’s support is falling among Democrats and women, as Trump has picked up independent voters. Trump leads Biden by 4 percentage points in the latest DailyMail.com/J.L. Partners poll on the 2024 presidential election.
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