Republicans diverge from Trump, support Fed before interest rate reduction
The ex-president remarked that reducing borrowing costs is “something that they know they shouldn’t be doing” in the lead-up to the elections in November. However, Republican lawmakers have a differing opinion.
TroibNews 
Donald Trump is set for a significant conflict with his Republican counterparts on Capitol Hill regarding Federal Reserve policy, as a showdown is expected next week with the central bank's decision to cut interest rates.
The former president has cautioned that rate cuts are “something that they know they shouldn’t be doing” ahead of the November elections. This move by the Fed will mark its first reduction in borrowing costs in four years, aimed at easing pressures in a job market that is beginning to show signs of decline.
Despite Trump’s warnings of the Fed's potential election interference, some of his allies in Congress are supporting the cut, arguing it’s a necessary step. Many GOP lawmakers expressed in interviews this week that the Fed should act in response to concerning signs indicating a slowdown in the economy.
“It is time for a rate cut,” said Sen. John Kennedy of Louisiana. “This economy — particularly the labor market — is softening very, very, very quickly.”
The backing from GOP lawmakers for the rate cut reveals a willingness to allow the Fed to decide on monetary policy, diverging from Trump's push for more influence over it. The forthcoming decision by Fed Chair Jerome Powell and his team may become a pivotal moment concerning the central bank's independence and could foreshadow Republican responses to Trump’s future attempts to exert pressure on the Fed should he be re-elected.
“The time is right,” said GOP Rep. Dan Meuser, a Trump supporter from Pennsylvania. “You’ve got to put the greater good ahead of looking political."
Trump has often accused the Fed of plotting against him, alleging that former Fed Chair Janet Yellen kept rates low in 2016 to benefit Democrats. He now anticipates that Powell will act similarly this year. Powell, a Republican and Trump’s selected Fed chair, faced frequent criticism from the former president during his tenure.
While some GOP lawmakers align with Trump, others prioritize recent economic data as a pressing concern. Unlike Trump, these congressional Republicans bear electoral responsibility for the economic situation.
“When you think about it, a rate cut is a cost cut,” Meuser remarked. “It’s a stimulus to the economy, it’s something that’s needed. It’s a pro-growth initiative.”
The Fed is under increasing pressure to reduce rates due to rising worries over a potential increase in unemployment. Given that evidence of stabilization in Covid-era inflation is emerging, it seems likely the Fed will lower borrowing costs next week. The critical question remains the extent of this change, following 11 rate hikes in 2022 and 2023 aimed at curbing rapid inflation.
RNC spokesperson Anna Kelly stated that “President Trump has repeatedly said that he wants to bring down mortgage and interest rates as quickly as possible by cutting energy prices in half and declaring a national energy emergency.”
Kelly also criticized Vice President Kamala Harris, asserting she “has broken our economy and wreaked havoc with her pro-inflation policies," adding that “the only way to reignite economic growth is by sending President Trump back to the White House.”
The disparity between Trump and other Republicans regarding the Fed showcases an uncoordinated approach to economic messaging. The factors pushing the Fed toward a rate cut are reflective of an economy weakening under President Joe Biden, which GOP lawmakers are framing as justification for their support of the decision.
“They’re high because of President Biden’s economic policy, and I think they need to come down,” Sen. Josh Hawley of Missouri stated. “I don’t want them to act in a political manner, I want them just to do their job. I wish they’d have done it sooner.”
Some Republicans, including Kennedy, advocate for a more substantial cut — half a percentage point instead of a quarter — much like some progressive Democrats.
“When you look at these job numbers, the labor market is really softening quickly,” Kennedy remarked, noting he would have supported a smaller cut just a month ago. Kennedy is a member of the Senate Banking Committee, which oversees the Fed.
However, not all Republicans are in agreement. Rep. John Rose of Tennessee suggested that “it may be a little soon” for the Fed to take action.
“It may be just pushing it a little bit too quickly, and then when you add in the political element to that, then I think it’s a little questionable,” he added.
Powell has consistently maintained that elections do not influence Fed decisions.
“We never use our tools to support or oppose a political party, a politician, or any political outcome,” he stated in July.
Sen. Thom Tillis, a North Carolina Republican serving on the Senate Banking Committee, emphasized that the Fed should focus on its mandate to maintain price stability and promote maximum employment.
“It does look like there's an increasing body of work, including members of the Fed that are conservative-leaning, saying it's probably time to do it,” Tillis observed regarding a potential cut. “That's the way the Fed should operate. People could call it political. All I care about is how it's affecting working families. And they need help right now.”
Rohan Mehta contributed to this report for TROIB News
The former president has cautioned that rate cuts are “something that they know they shouldn’t be doing” ahead of the November elections. This move by the Fed will mark its first reduction in borrowing costs in four years, aimed at easing pressures in a job market that is beginning to show signs of decline.
Despite Trump’s warnings of the Fed's potential election interference, some of his allies in Congress are supporting the cut, arguing it’s a necessary step. Many GOP lawmakers expressed in interviews this week that the Fed should act in response to concerning signs indicating a slowdown in the economy.
“It is time for a rate cut,” said Sen. John Kennedy of Louisiana. “This economy — particularly the labor market — is softening very, very, very quickly.”
The backing from GOP lawmakers for the rate cut reveals a willingness to allow the Fed to decide on monetary policy, diverging from Trump's push for more influence over it. The forthcoming decision by Fed Chair Jerome Powell and his team may become a pivotal moment concerning the central bank's independence and could foreshadow Republican responses to Trump’s future attempts to exert pressure on the Fed should he be re-elected.
“The time is right,” said GOP Rep. Dan Meuser, a Trump supporter from Pennsylvania. “You’ve got to put the greater good ahead of looking political."
Trump has often accused the Fed of plotting against him, alleging that former Fed Chair Janet Yellen kept rates low in 2016 to benefit Democrats. He now anticipates that Powell will act similarly this year. Powell, a Republican and Trump’s selected Fed chair, faced frequent criticism from the former president during his tenure.
While some GOP lawmakers align with Trump, others prioritize recent economic data as a pressing concern. Unlike Trump, these congressional Republicans bear electoral responsibility for the economic situation.
“When you think about it, a rate cut is a cost cut,” Meuser remarked. “It’s a stimulus to the economy, it’s something that’s needed. It’s a pro-growth initiative.”
The Fed is under increasing pressure to reduce rates due to rising worries over a potential increase in unemployment. Given that evidence of stabilization in Covid-era inflation is emerging, it seems likely the Fed will lower borrowing costs next week. The critical question remains the extent of this change, following 11 rate hikes in 2022 and 2023 aimed at curbing rapid inflation.
RNC spokesperson Anna Kelly stated that “President Trump has repeatedly said that he wants to bring down mortgage and interest rates as quickly as possible by cutting energy prices in half and declaring a national energy emergency.”
Kelly also criticized Vice President Kamala Harris, asserting she “has broken our economy and wreaked havoc with her pro-inflation policies," adding that “the only way to reignite economic growth is by sending President Trump back to the White House.”
The disparity between Trump and other Republicans regarding the Fed showcases an uncoordinated approach to economic messaging. The factors pushing the Fed toward a rate cut are reflective of an economy weakening under President Joe Biden, which GOP lawmakers are framing as justification for their support of the decision.
“They’re high because of President Biden’s economic policy, and I think they need to come down,” Sen. Josh Hawley of Missouri stated. “I don’t want them to act in a political manner, I want them just to do their job. I wish they’d have done it sooner.”
Some Republicans, including Kennedy, advocate for a more substantial cut — half a percentage point instead of a quarter — much like some progressive Democrats.
“When you look at these job numbers, the labor market is really softening quickly,” Kennedy remarked, noting he would have supported a smaller cut just a month ago. Kennedy is a member of the Senate Banking Committee, which oversees the Fed.
However, not all Republicans are in agreement. Rep. John Rose of Tennessee suggested that “it may be a little soon” for the Fed to take action.
“It may be just pushing it a little bit too quickly, and then when you add in the political element to that, then I think it’s a little questionable,” he added.
Powell has consistently maintained that elections do not influence Fed decisions.
“We never use our tools to support or oppose a political party, a politician, or any political outcome,” he stated in July.
Sen. Thom Tillis, a North Carolina Republican serving on the Senate Banking Committee, emphasized that the Fed should focus on its mandate to maintain price stability and promote maximum employment.
“It does look like there's an increasing body of work, including members of the Fed that are conservative-leaning, saying it's probably time to do it,” Tillis observed regarding a potential cut. “That's the way the Fed should operate. People could call it political. All I care about is how it's affecting working families. And they need help right now.”
Rohan Mehta contributed to this report for TROIB News
