Fed is about to cut rates again

The Federal Reserve has eight scheduled two-day monetary policy meetings each year. One of those meetings takes place in November and coincidentally started on the Wednesday immediately after Election Day.

As Fed Chairman Jerome Powell has previously promised, officials do not take the political calendar into account when making interest rate decisions. Instead, it’s always about doing what’s best for the economy, Powell’s says.

Still, the proximity of this meeting to Election Day has put the Fed in an awkward position — whether Powell and his colleagues want to admit it or not.

Officials have already come under scrutiny for their decision to cut rates at the last meeting before the elections, which took place in September. The concern was that the Fed could have inadvertently helped Democrats by lowering borrowing costs for Americans, potentially making some feel better about the state of the economy as they prepared to cast votes.

But even though this month’s meeting takes place after the election, central bankers may still appear to be supporting one political party over another.

For example, if the Fed scales back the size of its rate cut — or doesn’t cut rates at all — it could give some people the renewed impression that officials wanted to improve the election outcome for Democrats by boosting support. -then make customary cuts at the September meeting instead of waiting to do so at this month’s meeting.