On September 18, the Federal Reserve announced a 50 basis point cut in its policy rate range to 4.75%-5.00%. With only seven weeks left before Election Day, the Fed announced a significant rate cut, what did both candidates have to say about this?

Trump doubts motives for rate cut

Republican nominee Donald Trump's view of the cut was on the negative side.

“My guess is that if they're not just playing politics, then cutting this much is a sign that the economy is in very bad shape.” Trump said, “Either the economy is in very bad shape or they're playing politics, but this is a big cut.”

Trump's view is the opposite of what the Fed has stated. In a press conference following the Fed's September interest rate resolution, Fed Chairman Jerome Powell emphasized that the U.S. economy is generally strong and has made significant progress toward our goals.

In the first half of the year, U.S. GDP grew at an annualized rate of 2.2 percent, and Powell said available data suggests that growth in the third quarter will be at roughly the same pace as in the first half.

Trump supporters also see the rate cut as laced with political motivation. Hedge fund billionaire John Paulson, a major donor to Republican presidential candidate Trump, said in a statement, “

Traditionally the Fed has not cut rates this close to an election and the only time it did so this century was in the wake of the 2008 financial collapse, which required dramatic action. We are not in a similar situation today.”

He further noted, “This decision begs the question if the timing was intended to boost Vice President Harris’ campaign. The Fed claims to be above politics, but the timing of today’s actions today cast doubt on its claims.”

It's worth noting that Powell was elevated to Fed chair while Trump was president, but the two sides have since frequently disagreed.

In recent weeks, Trump has also said outright that the president should have more say in how the Fed handles interest rates and monetary policy. This implies that Trump wants to upend the independence that the Fed has long maintained. He has also said that if he wins the election this year, he will not reappoint Powell as Fed chairman.

Harris sees rate cuts as a boon

Contrary to Trump's “skepticism”, Democratic candidate Harris welcomed the rate cut.

In a statement, Harris said the decision was “good news for Americans who are bearing the brunt of high prices”.

Harris added, “I know that prices are still too high for many middle-class and working families, and when I serve as president, my top priority will be to lower the cost of everyday needs like health care, housing and groceries.”

Harris also used the occasion to slam Trump. She said it was the exact opposite of what Trump would do as president. While he has proposed tax cuts for billionaires and large corporations, his plan would add nearly $4,000 a year to families' expenses by imposing a Trump tax on goods they depend on, such as gasoline, food and clothing.

However, Harris's comments also expose how hard inflation has hit American families during Biden's presidency.

As the current president, Biden also expressed similar views to Harris in a statement. He viewed the Fed's first rate cut in more than four years as an “important moment” in the fight against inflation.

“Inflation and interest rates are falling while the economy remains strong,” Biden said. “The critics said it couldn’t happen – but our policies are lowering costs and creating jobs.”