The Federal Reserve has cut interest rates, amid reports that Donald Trump will allow Chair Jerome Powell to remain in his job until 2026.
The central bank made a 25 basis point cut Thursday, bringing rates down between 4.5 percent and 4.75 percent.
Lower rates are good news for consumers as it makes borrowing money less expensive, and should mean cheaper loans and credit card rates eventually trickle down to Americans.
It is the second consecutive time the Fed, led by Powell, has cut rates this year, following an aggressive rate-hiking campaign to curb inflation.
The decision comes days after Trump staged a political comeback, defeating Kamala Harris to win the race to become 47th president of the United States.
During his election campaign, Trump had voiced his frustrations with Powell and even threatened to remove him from his role as Fed Chair – an unprecedented move for any president.
The Federal Reserve has cut interest rates, amid reports that Donald Trump will allow Chair Jerome Powell to remain in his job until 2026
‘I feel the president should have at least say in there,’ Trump said during his campaign cycle.
‘In my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve, or the chairman.’
But he is now expected to allow Powell to stay in his job until the end of his term in May, 2026, according to CNN.
While Trump could still change his mind, the current thinking among him and his economic team is that Powell will remain at the helm of the central bank as it works to slash interest rates.
Powell, a Republican with a background in private equity, was originally appointed to lead the Fed by Trump in 2018. President Joe Biden later reappointed him for a second term.
Trump has also taken issue with the Fed’s lack of transparency, criticizing its private policy meetings and the delayed release of discussion notes.
According to CNN, Trump’s aides have suggested that he’d prefer real-time publication of Fed minutes and economic reports, with meetings held on-camera for greater public insight.
During Trump’s first term, he and Powell clashed repeatedly. In 2018, Trump openly considered replacing Powell after a rate hike by the central bank, though the president legally cannot remove a Fed chair unless they break the law.
Thursday’s decision is the second time the Fed has cut rates this year, amid a slowing labor market and cooling inflation.
Policymakers voted to cut interest rates by a bumper 50 basis points in September, bringing benchmark borrowing costs down from 23-year highs.
During his election campaign, Trump voiced his frustrations with Powell and even threatened to remove him from his role as Fed Chair – an unprecedented move for any president
Experts note that while the decision to keep Powell as Fed Chair is significant, it may be overshadowed by the potential economic changes a second Trump administration could bring.
Trump’s recent election victory and the likelihood of a Republican-controlled Congress by January signal possible policy shifts – from import tariffs to tax cuts and restricted immigration – that could reshape the economic landscape Fed policymakers anticipated for next year.
While these changes could take months to navigate through Congress, even with Republican majorities, they hold the potential to alter the country’s outlook on growth and inflation significantly.
Economists from across the political spectrum have warned Trump’s policies could reignite inflation – and therefore slow or stop the Fed’s moves to cut interest rates.
This article was originally published by a www.dailymail.co.uk . Read the Original article here. .