This week, legislators from both parties have unequivocally indicated to Federal Reserve Chairman Powell that no matter what decision the Federal Reserve makes at its last meeting before the November election, it will be criticized. Product structure, operating income of 100-300 billion yuan products is 401/1288/60 million yuan respectively.

Powell said the Federal Reserve is gradually approaching a rate cut, and market observers are now betting on its mid-September rate cut, provided that another inflation data continues to be positive. The Federal Reserve's September rate meeting is less than seven weeks away from the US presidential election day.

Both parties have said this week that if this critical decision in September does not develop in the direction they expected, they will criticize the Federal Reserve.

If Powell and his colleagues choose to keep interest rates at their highest level in 23 years, the voices of Democratic critics calling for a rate cut are likely to peak. But if policymakers do cut interest rates, Republicans led by Trump will undoubtedly see the move as the Federal Reserve yielding to election-year pressure.

Powell has had to face bipartisan concerns about interest rates. Sherrod Brown, chairman of the Senate Banking Committee from the left, told Powell on Tuesday, 'I'm worried that if the Federal Reserve waits too long, it could weaken the progress we've made.'

The Democratic from Ohio, who is currently campaigning for reelection, said, 'If the Federal Reserve is too focused on inflation targets and leads to completely unnecessary recession, workers will lose too much.'

Right-wing pressure is equally evident. Republican Patrick McHenry, chairman of the House Financial Services Committee, told Powell on Wednesday, 'You cannot allow politics to interfere with the Fed's monetary policy.'

Kentucky Republican Congressman Andy Barr was more explicit, telling reporters earlier this week, 'I don't think the September rate cut will be seen as beyond politics.'

Powell's response to this wave of political pressure is to reaffirm his independent position formed in 2024, emphasizing that the only important standard for him is inflation and employment data. He defended himself on Wednesday:

'Our political independence is crucial to our performance of duties and maintenance of the trust of the people of all political parties. Everything we do will be based on a solid foundation and we do not consider the election cycle at all.'

Before the highly anticipated September meeting, Powell and his FOMC colleagues will also meet from July 30-31. But traders currently predict only a 91% chance that the Federal Reserve will remain unchanged this month.

This will pave the way for the highly anticipated September rate meeting, when the situation will be very different. As of Thursday night, the market believed that the likelihood of Powell and his colleagues ending this meeting by keeping interest rates at current levels was only 7.3%. Claudia Sahm, a former Federal Reserve economist, said this week, 'I think the Federal Reserve has good reason to start gradually lowering interest rates. But the exact timing is still unclear, and Powell faces an economic situation that was unimaginable a year ago, as is the political situation.'

Wave after wave of pressure

This week Powell's discussions with legislators covered a wide range of topics, from controversial banking capital proposals known as the Basel III accords to bank executive bonuses, national debt, and the Fed's own independence.

However, lawmakers have repeatedly tried to push Powell on interest rates.

In a significant exchange, Republican Senator Kevin Cramer expressed support for the Fed's independence, but then couldn't help adding, 'Any move to lower rates or move rates in any direction before November 5th could be seen as a bad impression.'

On the other hand, Virginia Democratic Senator Mark Warner mentioned the context of high mortgage rates when talking about interest rates, saying that he hopes the rate cut will come 'as soon as possible'.

New York Republican Congressman Mike Lauder asked Powell if he recognized that the rate cut in September 'could be seen as a political factor in the last 30-60 days before the election.' Even so, Powell reiterated his view that any decision would be independent of politics.

Powell said, 'This is my fourth presidential election experience at the Federal Reserve, and I can tell you that we will continue to work the next day and fulfill our duties.'

This will indeed be the case, as the Federal Reserve's November rate meeting is scheduled to take place in the early hours of November 6th, just a few hours after the end of the US presidential election vote.

Editor/new