Biden to Discuss Economy in Speech After Fed Rate Cut

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The Federal Reserve sharply cut interest rates by 50 basis points on Wednesday.

WASHINGTON—President Joe Biden will address business executives on Thursday at a lunch hosted by the Economic Club of Washington, D.C., where he is anticipated to highlight his economic policies.

During the event, Biden is expected to tout progress made since taking office, including the United States’ response to the pandemic, and will blame the rise in inflation on Russia’s invasion of Ukraine.

“President Biden is going to speak to a new milestone, inflation and interest rates are falling at the same time, employment, wages, and GDP are rising,” White House Chief of Staff Jeff Zients told reporters during a call on Wednesday. “I want to be really clear, this is not meant to be a declaration of victory. It’s meant to be a declaration of progress, significant progress.”

The Federal Reserve slashed interest rates on Wednesday, kicking off its first easing campaign since the pandemic.

The central bank policymakers lowered the benchmark federal funds rate by 50 basis points to a range of 4.75 percent to 5 percent following its policy meeting on Sept. 18.

Fed policymakers said in their statement that they have “gained greater confidence” in bringing inflation down and hence anticipate another 50-basis-point cut in interest rates this year.

Biden welcomed the announcement on social media platform X on Wednesday.

“The critics said it couldn’t happen—but our policies are lowering costs and creating jobs,” Biden said. “I’ll speak tomorrow about what this means for Americans.”

The Fed’s move to lower rates for the first time in four years is important for consumers as it influences interest rates on credit cards, auto loans, mortgages, and other financial products, as well as savings accounts.

National economic adviser Lael Brainard also talked about the progress made during the call with reporters, stating that the Fed’s decision is a “clear signal that inflation has come back down.”

“The focus now has to be on sustaining the gains we’ve seen,” she said.

Brainard, however, noted that more work was required to improve labor force participation and bring down costs, notably housing prices, by developing millions of new affordable homes.

The central bank’s decision to sharply lower interest rates just ahead of November’s presidential election, however, met with some criticism from Republicans, including former President Donald Trump.

“I guess it shows the economy is very bad, to cut it by that much, assuming they’re not just playing politics,” Trump, the Republican presidential nominee, told reporters during a visit to a New York City bar on Wednesday.

“The economy would be very bad, or they’re playing politics. But it was a big cut.”

Sen. Tommy Tuberville (R-Ala.) also reacted to the Fed’s decision.

“The Fed’s drastic rate cut is so shamelessly political,” Tuberville wrote in a post on X. “Our nation’s central bank has no business moving rates this close to an election and is clearly trying to tip the balance in favor of Kamala Harris.”