Trump condemns Fed rate cut as a ‘political move’ destined to fail

Donald Trump, the Republican presidential candidate, described the move by the Federal Reserve to cut its benchmark interest rate by half a percentage point as a " political move," and said it would have been better if the move had been smaller, according to a report by Bloomberg.

“It really is a political move. Most people thought it was going to be half of that number, which probably would have been the right thing to do,” Trump said in an interview with Newsmax on Thursday. “So it’s a political move to try and keep somebody in office, but it’s not gonna work, because the inflation has been so bad.”

The former president appeared to then level criticism at Fed Chairman Jerome Powell, saying he "missed the inflation."

“They missed it. They missed the number. They’re either too early or too late. Now they’re too early. Before they were too late. But inflation is already done,” Trump said.

The half-point cut was the Fed's first rate reduction in more than four years and came after holding rates at their highest level in two decades for more than a year.

Trump has often criticised the central bank and has said he believes that presidents should be involved in a greater capacity in determining the Fed's interest-rate decisions. That represents a direct contradiction of long-standing efforts to remove politics from such decisions to the extent possible. He also suggested not reappointing Powell as Fed chief.

His comments came after earlier Thursday when President Joe Biden said the rate reduction was "an important signal" that inflation had moderated.

“Lowering interest rates isn’t a declaration of victory,” Biden told the Economic Club of Washington, DC. “It’s a declaration of progress, to signal we’ve entered a new phase of our economy and our recovery.”