President Joe Biden stood by his prediction that the Federal Reserve cut the interest rate before the end of 2024. This comes after a Consumer Price Index (CPI) print recently released suggested that inflation was once again rising in the U.S.
President Biden said that the March report on inflation, which ticked higher, may delay an expected interest rate cut.
Last month, Biden predicted the Federal Reserve would cut interest rates, which could boost him ahead of November’s election. https://t.co/L5TXSywW2A
— The Hill (@thehill) April 11, 2024
During a press conference alongside Japanese Prime Minister Fumio Kishida, the president said, “Well, I do stand by my prediction that, before the year is out, there’ll be a rate cut.”
Biden’s comments raises concerns about the “political independence” of the U.S. central bank in an election year according to the National Pulse.
The National Pulse pointed out that many Democrats believe an interest rate cut by the Federal Reserve could bolster the economy while boosting Biden’s chances of winning reelection.
Federal Reserve Chairman Jerome Powell recently gave a speech, maintaining that the central bank prohibits partisan considerations to impact their monetary decisions.
“Fed policymakers serve long terms that are not synchronized with election cycles,” the chairman said. “Our decisions are not subject to reversal by other parts of the government, other than through legislation.”
“This independence both enables and requires us to make our monetary policy decisions without consideration of short-term political matters,” Powell continued.
The recently released CPI data cast further doubt on whether the Federal Reserve would act on reducing interest rates in the U.S. shortly. The central bank has consistently expressed its belief that interest rates must remain elevated until inflation reaches 2%.
Biden’s comments come after he criticized then-President Donald Trump over his calls to the Federal Reserve to lower interest rates in 2019.
“The president should not be trying to pressure the Fed,” Biden said during a 2019 interview with CNBC host John Harwood.
“That’s supposed to be an independent entity out here. It’s just like how he pressures the military and intervenes in the chain of command,” he added.
“It’s a big mistake. A big mistake, and I would not do that,” Biden continued.
It appears Biden forgot what he said a couple of years ago considering that he is now not only pushing for lower interest rates but is predicting when the Federal Reserve should enact the cut.
