Probably, the Fed will not change rates until the US elections
The day before Patrick Harker, the president of the Federal Reserve Bank of Philadelphia, said that the Fed might postpone the monetary policy changes until end of the US elections on 8 November. He also paid attention to the fact that the country’s economy looked “pretty good” and the US labor market was stable.
Frequently, the Fed officials do their best to distance themselves from the electoral process. Therefore, the Harker’s words became the evidence that the regulator could develop their policy, looking back for the winner in the presidential race.
The Harker’s statement can make angry the Republican presidential candidate Donald Trump, who previously accused the Fed that it kept the interest rates low on behalf of the Barak Obama’s cabinet. The Fed denies that the independent central bank is guided by the political considerations in their activities.
Harker says that the US political life doesn’t affect the internal Fed discussions.
“What I’m worried about is depending on the outcome of the election and what happens after that if there are policies that would have distortive effects that we would have to respond to, we’ll have to respond,” Harker told to the reporters.
“And I don’t know which way that will go. But it may be prudent to wait until we have resolved some of that uncertainty.”
Investors, considering the upcoming elections, have doubts that the rate will be raised in November.
According to the voters’ polls, the Democratic candidate Hillary Clinton is leading. According to some economists, Trump’s victory can undermine the American economy as in his campaign promises the Republican told about the plans to create barriers in the foreign trade.