Powell downplays impact of rate cut on Trump-Harris presidential race

Federal Reserve Chair Jerome Powell suggested that Wednesday's larger-than-expected interest rate cut may have a limited effect on the presidential race between Vice President Kamala Harris and Donald Trump, because the decision's impacts will ripple into the economy slowly.

"The things that we do really affect economic conditions for the most part with a lag," Powell said at his press conference, responding to a reporter's question about timing the long-awaited rate cut, just 48 days until the Nov. 5 election.

The Fed on Wednesday announced its decision to cut interest rates by an aggressive 50 basis points, its first cut since March 2020, marking a milestone in the U.S. economy's post-pandemic recovery.

Harris and Trump are both working to pitch themselves as the best candidate for the health of the U.S. economy, as voters repeatedly rank the high costs of living as their top issue in national polls.

"We just reached an important moment: Inflation and interest rates are falling while the economy remains strong," President Joe Biden wrote in an X post following the announcement.

This is a developing story. Check back for updates.