Trump election won’t jolt economic policies, Fed says

The Federal Reserve on Thursday lowered its key interest rates by a quarter of a percent, putting them in the 4.5-4.75% range. The move will make it cheaper for banks and businesses to borrow and lend money, according to the Federal Reserve. It’ll also give everyday Americans more freedom to buy a car or obtain a mortgage.

How will Trump’s return to the White House affect the Fed’s decisions? In the short term, the election would not affect the Federal Reserve’s policy decisions, Chairman Jerome Powell told reporters on Thursday. He did acknowledge that executive branch actions can affect the economy in the long term but insisted the economy was complex and hard to predict. Powell said he would not step down from his position if President-elect Donald Trump asked him to.

Where is inflation sitting right now? Inflation sat around 2.1% on Thursday, Powell said. That’s just shy of the Fed’s goal of 2%. The central bank’s decision to lower interest rates followed a massive drop in the number of workers hired by U.S. employers last month as compared to previous months. It also came just a day after the stock market’s exultant response to Trump’s success on Election Day.

Dig deeper: Read David L. Bahnsen’s column in WORLD Opinions about how Trump’s victory in the 2024 election sparked economic optimism among investors.