Fed set to cut interest rates for second time this year

Regardless of the presidential election, the Federal Reserve is set to cut interest rates for the second time this year this week. In September, rates were cut half a point.

Economists say the Fed will likely cut interest rates by a quarter point, down to about 4.6%, on Thursday. The Fed often cuts rates to boost the economy, but this time Chair Jerome Powell said the central bank is lowering rates as part of a recalibration to a lower-inflation environment.

While experts say this cut won’t be impacted by the presidential election, future ones could be.

“The Fed’s independence is incredibly important for making sure that inflation stays well anchored, and that is an area of some concern from the Trump camp, which has threatened the independence of the Fed and suggested that he might want more control of the Fed,” said Tara Sinclair, a professor of economics and international affairs at George Washington University.

As for Vice President Kamala Harris and her campaign, Sinclair said there is no indication they will interfere with the Fed.

Looking ahead, economists predict another quarter-point rate cut will be made in December and possibly additional cuts next year.

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