The Federal Reserve Isn’t Political. Well, Not Exactly.

In an interview with 60 Minutes that aired Sunday, Federal Reserve Chair Jerome Powell was asked “to what degree does politics determine your timing” of when to reduce interest rates? Powell firmly replied that “we do not consider politics in our decisions. We never do. And we never will.” Well, not exactly. The Fed won’t use its powers in setting monetary policy to influence who wins the White House this year, but some of Powell’s answers suggested the central bank will do what it can to ensure that it maintains its current powers after the election.

There is no denying that the Fed is caught in the political crosshairs. The economy is always an important issue for American voters and the Fed’s actions this year, perhaps more than ever before, will shape how strong the economy is on Election Day in November. And so, politicians — on both sides of the aisle — are dialing up their pressure on policymakers at the Fed. Former President Donald Trump said recently that he believes the Fed is “going to do something to help the Democrats,” like lowering rates, and that he would fire Powell if reelected. Democrats such as Senator Elizabeth Warren of Massachusetts told the Fed to cut rates to improve housing affordability - a major concern among voters.