A crowd assembled to hear Republican vice presidential candidate JD Vance speak on Wednesday reacted strongly to a reporter’s question about the Federal Reserve cutting interest rates by half a percentage point, booing as the journalist pointed out that the move would take the strain off Americans struggling with rising prices.
“Just on the Fed cutting—it’s a very Wall Street Journal-y question, but the Fed cut the interest rate today by a half a percentage point,” the reporter can be heard saying in footage of the Raleigh, North Carolina. rally, “[that’s] going to alleviate inflation for a lot of people. And so if you have any reaction to that?”
As the audience jeered, Vance replied, “Look, my reaction is… half a point is nothing compared to what American families have been dealing with for the last three years.”
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He smirked as the crowd whipsawed in the other direction, cheering.
The Fed’s decision to lower interest rates by 50 basis points is its first such move since the early days of the pandemic, and comes after nearly two years of steady increases—11 times, for a total of 5.25 percentage points.
An aggressive but widely expected move, the announcement is nevertheless a watershed moment for both the American economy and consumers on the ground, who should start to feel some financial strain taken off their wallets as the effects of the cut take hold. Lower interest rates make it less expensive to purchase goods, buy a house, or expand a business. They also inevitably lead to inflation as the market grows—hence the need for raising interest rates.
But the pivot is an indicator of the central bank’s belief that the worst of inflation is over, as well as a stopgap measure for a slowing economy. It is unclear if more cuts are on the way, but Fed chairman Jerome Powell indicated on Wednesday that it was at least a possibility.
“We’re going to take it meeting by meeting,” Powell said, according to The New York Times. “We made a good, strong start to this, and that is frankly a sign of our confidence, confidence that inflation is coming down.”
Officials on both sides of the aisle used strikingly similar language in hailing the decision as a win, with Vice President Kamala Harris calling it “welcome news for Americans who have borne the brunt of high prices” and Republican House Speaker Mike Johnson as “welcome news for consumers.”
Johnson tempered his reaction by challenging the Fed’s timing, calling it “suspect” that rates were slashed “right on the eve of an election.”
Former President Donald Trump ran with that line of questioning during a Wednesday pitstop at a so-called “bitcoin bar” in New York City.
“I guess it shows the economy is very bad to cut it by that much, assuming they’re not just playing politics,” Trump said, referring to the central bank. “The economy would be very bad, or they’re playing politics, one or the other. But it was a big cut.”
