During an interview with FOX Business’ Maria Bartimo in February, Powell said that he would not reappoint Powell to a third term as Fed chief.
“I think he’s political,” he said at the time. “I think he’s going to do something to probably help the Democrats, I think, if he lowers interest rates.”
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Policymakers raised interest rates sharply in 2022 and 2023 to the highest level in more than two decades in a bid to slow the economy and cool inflation. Officials are now grappling with when they should take their foot off the brake amid signs that inflation is normalizing.
Higher interest rates tend to create higher rates on consumer and business loans, which then slow the economy by forcing employers to cut back on spending. Higher rates helped push the average rate on 30-year mortgages above 8% for the first time in decades. Borrowing costs for everything from home equity lines of credit, auto loans and credit cards have also spiked.
