Fed Chair Powell under political pressure to cut rates

As investors await Federal Reserve Chair Jerome Powell's highly anticipated press conference, the central bank is under mounting political pressure to implement rate cuts. Notably, numerous Democratic policymakers have taken to sending letters to Chairman Powell, urging him to lower interest rates.

Yahoo Finance's Rick Newman breaks down the details, shedding light on the political pressures the central bank faces.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video Transcript

Now, as investors look ahead to Fed, Chair Powell's comments this afternoon, political pressure for the Federal Reserve to cut rates is rising more on the politics of Fed policy.

We bring in Yahoo finance his own.

Rick Newman.

Rick always a treat to speak with you.

Thanks for joining us.

So the reason we're talking about this stems from the letter that Senator Warren and I mean, others have also been increasingly kind of making their commentary about what they want the Federal Reserve to do more vocal how out of character is that it seems to me like a little bit of a potential overstep.

Is that true for you in terms of your long term coverage of politics in DC?

Everybody wants the Fed to cut interest rates and apparently nobody's worried about inflation anymore.

Um I don't think this is that out of character.

I mean, when Donald Trump was president, at least not in modern times, uh when Donald Trump was president, he constantly be rated uh the fed and uh chair Jay Powell to do what he wanted basically to cut rates as low as possible.

Um But I, I mean, if Powell is not, he's not a pushover.

Um He's going to do what he uh he thinks he has to do.

And we, we've seen this for the last um basically 12 to 18 months.

I mean, Elizabeth Warren and a few other liberal members of Congress have been hammering Powell to cut rates because they say that uh this is, you know, high, higher rates are hurting consumers and specifically lower income consumers.

That is true.

But II, I don't know what Elizabeth Warren thinks about inflation.

I mean, inflation hurts consumers and lower income consumers as well.

So, um I think one of the dynamics here is it's easy for politicians to hold hearings or send letters and hammer the Federal Reserve when they know the fed is just going to do what it's going to do.

I mean, there's definitely an element of posturing here because I think Elizabeth Warren is pretty clear that she's not going to persuade uh chair Powell or the Fed to cut rates before they're ready to do it.

I, I guess the good news is that at some point, I mean, rate cuts are start starting to come into view here as we get more favorable inflation numbers like we did today.

So maybe we will finally have some rate cuts and, and, and uh some of these politicians will get what they're, what they're after.

But uh I mean, not too nothing is coming uh imminently.

All right, Rick, thank you.

So much for joining us, really appreciate you breaking that down and of course, all eyes on the Fed meeting and the subsequent conference later today.