WASHINGTON, D.C. – This week the Federal Reserve will meet for a final time before the new year. If that happens, it could lower interest rate costs for millions of borrowers.
If the Fed makes another consecutive cut, it could bring the federal funds rate to 3.5 to 3.75 percentage rate. Fed’s decisions on interest rates influence the rates individual borrowers pay for many consumer loans, like car loans, mortgage, credit cards and personal loans, just to name a few. Ahead of the meeting, reports state a handful of Fed officials have made the case there is not a strong case to cut rates because of concerns about inflation, which still remains slightly above their two percent goal.
Throughout the year, the Fed Chairman, Jerome Powell, defended the Fed’s decisions on cutting or not cutting rates. He said it was due to managing inflation along with changes in the market due to the President’s global tariff trade war.
The President has aired his frustrations with the Fed, and it’s chairman, for not cutting rates enough. We asked Senator Dave McCormick (R- PA), who sits on the Senate’s Banking, Housing and Urban Affairs Committee, about the fed’s performance.
“Looking back at COVID and what’s happened, I think they were too slow to raise interest rates which led to this inflation,” said Sen. McCormick. “That’s really killing working families, the inflation under Biden was the highest percent in the 80s. 9 percent in one year, [inaudible], so too slow to raise them and too slow to lower them and then once we got the challenges of COVID past us so I don’t think the central bank’s performance has been great during this period.”
Powell’s term as the chairman will end next year. We asked the Senator who should replace Powell.
“I won’
t get into speculating who it should be,” said Sen. McCormick. “I think it’s very important that our Federal Reserve Chair be independent and look at the data with the federal reserve board and do what’s best for the economy, meeting its mandate and that mandate is price stability which deals with inflation and job creation. That’s essentially the dual mandate and so I think he’s [Trump] gotta pick somebody that has that credibility to do that.”
