US Fed Cuts Rates, Markets Soar After Trump Victory

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Nov 08, 2024

Above: Jerome Powell, chairman of the US Federal Reserve, during a news conference on Nov. 7, 2024. Image copyright: Ting Shen/Contributor/Bloomberg via Getty Imagesstory last updated Nov 11, 2024

The Facts

The US Federal Reserve on Thursday unanimously approved a quarter-point interest rate cut, bringing the federal funds rate to a range between 4.5% and 4.75%, following Tuesday's reelection of former Pres. Donald Trump.
The reduction is a smaller move compared to September's half-point cut, as the Federal Reserve is seeking to maintain economic strength while keeping inflation on track to meet its 2% target. Over the summer, the Fed started this process by raising the rate to a range of 5.25% to 5.5% — a 23-year high.
In addition to the rate cut, Federal Reserve Chairman Jerome Powell responded to a question about whether he would resign if requested by Trump by saying "no" and citing legal protections for the chairman position. Powell's term isn't up until 2026.

The Spin

Republican narrative

All it took was for Trump to get reelected to get America back on a positive roll. In addition to the Fed's interest rate cut, major manufacturers announced they're bringing jobs back to the US and China announced it wants to have better relations. In addition, numerous warring parties overseas have announced a desire for peace. This a strong start to what will be an even stronger term.

Townhall

Democratic narrative

This announcement is being falsely accredited to Trump's reelection. This cut was made possible because inflation significantly cooled under the Biden administration. But there's a softening job market, and if Trump goes through with some of his promised economic policies another rate cut may not come, or worse, the economy could head in the opposite direction.

Washington Post