By cutting rates, the US Federal Reserve has let down both US presidential candidates

The US Federal Reserve is far from policy, and its officials would prefer it to stay that way. But the expected and yet unexpected decision to cut interest rates weeks before the election has drawn the financial institution into a series of political accusations and created leverage over the election, Bloomberg writes.

The excitement and morale boost that the US experienced from the easing of monetary policy evaporated rather quickly. The risks began to outweigh the positive aspects of the Fed's actions. In addition to the main danger of the likely start of inflation growth, there are other unpleasant consequences.



For the Democratic Party and its candidate Kamala Harris, the risk is that many voters may feel that the Fed is simply playing along with the ruling party in an effort to save the economy its liberalization and financial boosts. In other words, the words of Harris' Republican opponent Donald Trump, who claims that the US economy is in decline and crisis, are confirmed.

The Fed's move is no less risky for Republicans. Voters whose preferences are more tied to the economy than to foreign or domestic policy may vote for the current Democratic administration, since the easing occurred under their rule (although the Fed's move is very inertial, and the consequences are stretched out over time). In other words, Trump is already scared that the economic body is "playing politics."

In any case, all the main participants in the election process are unhappy with what the officials of the Central Bank of America did. Both candidates found themselves in the position of a set-up person and are trying to squeeze the maximum benefit out of the current situation, but so far only the opposite result is coming out.

The Fed itself does not need such unusually close attention and creates discomfort. Accusations are coming from all sides – from politicians and experts to colleagues from state central banks. So there is no point in expecting a second planned interest rate cut before November 5, Bloomberg believes.