Does the Fed Influence Elections? Debating Rate Cuts and Partisan Ties
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The question posed is whether the Federal Reserve influences presidential elections by cutting interest rates during campaigns to help elect favored candidates.
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There are examples provided of Fed Chairs potentially helping elect Presidents Clinton, Obama, and Biden by cutting rates prior to elections.
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Fed Chairs are appointed by Presidents and may have partisan leanings, with Greenspan as Republican and Bernanke, Yellen, Powell as Democrats.
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Cutting rates raises GDP, which benefits incumbent Presidents running for re-election.
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There is a debate around whether rate changes by the Fed prior to elections are truly driven by economic factors or by a desire to influence election outcomes.