Fed Chair Powell says ‘time has come’ for shift toward interest rate cuts
(WASHINGTON) — Federal Reserve Chair Jerome Powell on Friday indicated that the central bank would soon begin cutting interest rates.
Speaking at an annual gathering in Jackson Hole, Wyoming, Powell said the “time has come” for the Fed to adjust its interest rate policy. The announcement comes after a yearslong effort to fight inflation with highly elevated interest rates.
At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. On Friday, Powell appeared to indicate that the Fed had achieved that objective.
“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.
Price increases have slowed significantly from a peak of more than 9%, but inflation remains nearly a percentage point higher than the Fed’s target rate of 2%.
In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
Recent economic developments have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said. The unemployment rate has ticked up this year from 3.7% to 4.3%.
“A cooldown in the labor market is unmistakable,” Powell said.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.
“Powell has rung the bell for the start of the cutting cycle,” Seema Shah, chief global strategist at investment firm Principal Asset Management, told ABC News in a statement. “Make no mistake, if the labor market shows signs of further cooling, the Fed will cut with conviction.”
Wall Street rallied in early trading on Friday after the remarks from Powell. Each of the major stock indexes climbed more than half a percentage point on the news.
(WASHINGTON) — Vice President Kamala Harris is expected to soon face her first post-convention test when she sits for a formal interview — something she told reporters this month she planned to do by the end of August, but has yet to announce.
With an absence of plans for any such sit-down, Republican critics have accused her of dodging the press.
“She refuses to do any interviews or press conferences, almost 30 days now, she has not done an interview,” former President Donald Trump said of Harris at a North Carolina event earlier this month. “You know why she hasn’t done an interview? Because she’s not smart. She’s not intelligent.”
His campaign has said Harris is trying to “duck and hide” from the news media.
The lack of a media interview has yet to hurt Harris, whose poll number are outpacing those of President Joe Biden when he was atop the Democratic ticket, according to 538’s national polling average. As of Tuesday, Harris is polling ahead of Trump, 47.2% to 43.6%; when Biden left the race, he was polling at 40.2% compared to Trump’s 43.5%, according to 538’s polling average.
Harris has also stirred an enthusiasm from Democrats that had been absent most of the campaign cycle — and is riding a high following last week’s Democratic National Convention in Chicago.
Moreover, she chose a running mate, Minnesota Gov. Tim Walz, whose rural background has helped the ticket craft a message Democrats have said they believe will make inroads with voters in conservative parts of the country.
All the while, Trump has seemed to abandon the discipline Republicans had lauded him for this summer. Recently, he has made false claims about the crowd size at a Harris rally and appeared to forget to mention a policy proposal he had been slated to unveil at an event in Michigan.
Democrats have cautioned that Harris has several hurdles to clear in the coming weeks.
One of those hurdles is the pending media interview, where Harris would likely have to defend the decisions of the Biden administration and specify some of her policy stances.
On Monday, Trump sought to spotlight Harris’ connection to the Biden administration’s chaotic withdrawal from Afghanistan, laying wreaths in Arlington National Cemetery to commemorate the third anniversary of the suicide bombing that killed 13 U.S. service members.
“Caused by Kamala Harris, Joe Biden, the humiliation in Afghanistan set off the collapse of American credibility and respect all around the world,” Trump claimed when he spoke to National Guardsmen at a Detroit event later Monday.
Harris is also likely to be pressed on how much she knew about Biden’s capacities prior to the June 27 debate. That night, she urged Americans to judge Biden not on the “90 minutes” on stage but the “three-and-a-half years of performance.”
Yet, that same debate performance set in motion a weekslong effort by top Democrats to nudge Biden from the race.
Few had a better understanding of what Biden was like behind the scenes than Harris, his No. 2, and an interviewer would likely challenge her about what she witnessed in private.
Harris would surely be asked about the war in Gaza. She said recently, “We need a cease-fire,” but is a member of an administration that has yet to help broker one.
The situation at the southern border would likely be another topic an interviewer would press Harris on. Republicans have linked her to an increase in unauthorized border crossings earlier in Biden’s term, misleadingly dubbing her the “border czar.”
An interviewer might also ask Harris to respond to the criticism of her recently unveiled economic plan, in which she called for an end to grocery “price-gouging,” prompting accusations by some Republicans that she wants “communist price controls.”
Harris travels this week to south Georgia, where she will embark on a bus tour and hold a rally in Savannah, Georgia.
(CHICAGO) — Former President Donald Trump’s interview on Wednesday at the National Association of Black Journalists annual convention in Chicago kicked off with a contentious start where he refused to answer his previous comments and why Black voters should trust him.
Trump had a conversation with ABC News Senior Congressional Correspondent Rachel Scott, Fox News anchor Harris Faulkner and Semafor political reporter Kadia Goba.
The first question came from ABC’s Scott, who asked about Trump’s past inflammatory rhetoric toward women of color.
“Now that you were asking Black supporters to vote for you, why should black voters trust you after you have used language like that?” Scott asked.
“Well, first of all, I don’t think I’ve ever been asked a question. So, in such a horrible manner, a first question. You don’t even say hello. Who are you? Are you with ABC? Because I think they’re a fake news network. A terrible network,” Trump began.
He also lashed out at NABJ for starting the program late and said they had him attending under false pretenses that his 2024 opponent would be participating, too.
“I love the Black population of this country,” he said, pointing to his work with Sen. Tim Scott on “opportunity zones” and his work on the economy.
When ABC’s Scott followed up by asking him to answer her question, Trump responded: “I have answered the question. I have been the best president for the Black population since Abraham Lincoln.”
The former president went on to mock Vice President Kamala Harris and when asked about Republican comments that she is a “DEI” hire, Trump deflected — asking the journalist instead to define DEI, which she did repeatedly.
NABJ is working with Politifact for real-time fact checking on Trump’s comments.
Trump’s appearance has stoked some criticism. April Ryan, the Washington bureau chief of theGrio who was awarded the NABJ’s “Journalist of the Year” back in 2017, wrote online that his invitation was “a slap in the face.”
Karen Attiah, the co-chair of the convention, resigned earlier this week after the NABJ announced Trump’s appearance. Attiah wrote in a post on X, “To the journalists interviewing Trump, I wish them the best of luck,” explaining that his appearance was only partly behind her decision and that it was “influenced by a variety of factors.”
Others, however, have defended the decision.
MSNBC host Symone Sanders-Townsend, who was formerly Harris’s spokesperson, wrote on X: “Some of the best journalists in the country are members of NABJ. So, why wouldn’t they interview Trump? He is the Republican nominee.”
“NABJ didn’t platform Trump. The voters in the Republican primary did. Just like anyone else who is running for President, he should sit for serious interviews and answer real questions,” she wrote.
Vice President Harris was also invited to attend, according to NABJ, which has hosted presidential candidates on both sides of the aisle for years. President Joe Biden, former Presidents Barack Obama, George W. Bush, Bill Clinton, Vice President Al Gore and Secretary of State Hillary Rodham Clinton have all attended the convention.
NABJ, in a statement on Wednesday, said that it was in contact with Harris’s team for an in-person panel before Biden had dropped out but “were advised by her campaign that her schedule could not accommodate this request.”
“The last update we were provided was that Harris would not be available in person or virtually during our Convention. We are in talks about virtual options in the future and are still working to reach an agreement,” Lemon said.
Though the Associated Press and NPR reported the organization declined an offer for her to appear virtually on Wednesday.
As Trump is in Chicago, Harris on Wednesday will have lunch with Biden at the White House before traveling to Houston, Texas, for a political event and to deliver remarks Sigma Gamma Rho Sorority Inc.’s 60th International Biennial Boule. The sorority is a historically Black organization with hundreds of chapters across the U.S. and internationally.
As the 2024 race ramps up, both Harris and Trump will be looking to shore up support among Black voters.
On the campaign trail this year, Trump’s suggested Black voters relate to his indictment and has frequently claims he will stop undocumented immigrants from taking “Black jobs.”
Harris, who is likely to be the first Black woman and the first person of South Asian descent to head a major party’s presidential ticket, recently encouraged Black voters to help make history by supporting her. In her speech, she pointed to wins under the current administration like the Child Tax Credit that reduced Black child poverty, student loan relief and lowering the costs of prescription drugs.
“In this moment, I believe we face a choice between two different visions for our nation, one focused on the future, the other focused on the past, and with your support, I am fighting for our nation’s future, and let us be clear about what that future looks like,” Harris said at the event.
A recent ABC News/Ipsos poll found enthusiasm for Harris as the Democratic nominee had peaked among Democrats (88%) and Black Americans (70%).
(WASHINGTON) — Kamala Harris’ presidential campaign expressed optimism about its path to the presidency this week, telling reporters in a memo that the change atop the ticket could help the vice president reach a new crop of voters as the campaign plans an aggressive approach to key battleground states.
The extraordinary and rapid ascension of Harris to be the presumptive Democratic nominee “opens up persuadable voters,” campaign manager Jennifer O’Malley Dillon wrote.
“The race is more fluid now. The Vice President is well-known but less well-known than both Trump and President Biden, particularly among Dem-leaning constituencies,” she added.
O’Malley Dillon said some in this “expanded universe of winnable voters were previously Democrats and support down-ballot Democrats this cycle,” a possible reference to the fact that some polls showed Biden with less support than Democrats running further down the ballot.
The memo outlined a plan to capitalize on Harris’ appeal with Black, Latino and women voters. It also suggested Harris could attract people who did not vote for the Democratic ticket in 2020 but moved toward Democrats in the years since.
Meanwhile, O’Malley Dillon stressed that the campaign has “multiple pathways” to 270 electoral votes and plans to “play offense” in the competitive Blue Wall states of Michigan, Wisconsin and Pennsylvania, as well as the Sun Belt states of North Carolina, Georgia, Arizona and Nevada.
Since Sunday, Harris has earned the backing of Democratic Party leaders and enough Democratic National Convention delegates to make her the nominee if they kept true to their pledges — a major milestone for the vice president.
The memo comes a day after the vice president had her first campaign event in battleground Wisconsin on Tuesday, sharply framing her race against former President Donald Trump.