On Wednesday’s broadcast of CNN International’s “First Move,” CNN Business Editor-at-Large, International Business Correspondent, and host Richard Quest stated that 2024 Republican presidential candidate former President Donald Trump has a point that the Federal Reserve is “either playing politics or you’ve cut by half a point because things are worse, marginally, than you thought they were going to be, things are worse and you need to stimulate.”
Host Julia Chatterley played video of Trump saying, [relevant portion begins around 21:00] “I guess it shows the economy is very bad to cut it by that much. Assuming they’re not just playing politics, the economy would be very bad, or they’re playing politics, one or the other. But it was a big cut.”
Quest responded, “Donald Trump is sort of right, in a sense. It’s — there’s no — it’s either playing politics or you’ve cut by half a point because things are worse, marginally, than you thought they were going to be, things are worse and you need to stimulate. And that, I think, is an inescapable position. Jay Powell is sitting uncomfortably, as he sort of says, well, we’ve waited a long time, but we’ve done a half a point because we think we can do it and — it’s not a crisis, … it’s not a panic, what it is is an aggressive move.”
Chatterley then said, “[W]e are more concerned than we were three months ago, even if growth is still at 2%, if inflation is contained. Now, they’re going to go all guns blazing to try and prevent the unemployment rate from rising too much further. Looks like a soft landing to me if they can do it.”
Quest responded, “If they can do it, because what he’s leaning into is the snowball going down the hill. … So, either the snowball is running down the hill and needs to be slowed down, or the cake is baking in the oven and needs to be taken out. Whichever one you like the look of, that’s what this half-a-percentage point is designed to do, plus, two more. He admitted, Jay Powell, today, that, if they’d had the numbers on employment earlier, they could have gone in July, could have, should have, would have. At the end of the day, I don’t think it’s a crisis, it’s just a sort of make haste.”
Quest further stated that the cut won’t have any impact on the economy before the election.
Follow Ian Hanchett on Twitter @IanHanchett
