Powell: Rate Cut Decision Will Be 'Apolitical'

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank could cut its key interest rate in September—and he stressed the November election will not affect the timing of cuts.

• Powell, speaking to reporters after the Fed left the rate unchanged at its highest level in 23 years, said Fed officials feel the economy "is moving closer to the point" where a rate cut would be appropriate, CNBC reports. "The question will be whether the totality of the data, the evolving outlook and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market," he said. "If that test is met, a reduction in our policy rate could be on the table for as soon as the next meeting in September."

• CNN notes that if the Fed cuts the rate in September, critics will likely accuse it of trying to help Democrats—but if it waits until the following meeting, which begins the day after Election Day in November, it could be accused of trying to help Republicans.
• Powell, who was nominated and later heavily criticized by Donald Trump, said any rate cut would be "apolitical." "We never use our tools to support or oppose a political party, a politician, or any political outcome," he said. Powell added that the Fed would never make decisions based on who wins an election. "That would just be a line we would never cross," he said, per CNN.
• The AP reports that three Democratic senators led by Sen. Elizabeth Warren urged Powell to cut rates in a letter Wednesday. They said failing to cut rates soon would show the Fed is "giving in to bullying."

(More Federal Reserve stories.)