US Fed makes quarter point cut as Powell insists he would not quit

The U.S. Federal Reserve shrugged off concerns about the economic impact of Donald Trump's election victory and moved ahead with a quarter-point cut on Thursday.

The Fed sits just a short walk from the White House, where Democratic President Joe Biden will hand back the keys to Trump in January following the Republican's election win.

But as expected, policymakers did their best to ignore the political drama playing out up the road, voting unanimously to trim interest rates by 25 basis points to between 4.50 and 4.75 percent, according to a Fed statement.

"In the near term, the election will have no effects on our policy decisions," Fed Chair Jerome Powell told reporters after the rate cut was announced, noting there was still uncertainty about what President-elect Trump's actual economic agenda would be.

"We don't guess, we don't speculate, and we don't assume," he said.

Powell also insisted he would not resign if asked to leave early by the president-elect, adding that firing any of the other leaders among the Fed's seven governors was "not permitted under the law."

The U.S. central bank's rate decision should help ease the costs of mortgages and other loans—welcome news for consumers, who had widely cited the cost of living as a top concern ahead of Tuesday's vote.

However, the cost of borrowing will also depend on how financial markets perceive the long-term impact of a Trump victory on the economy and the necessary level of the Fed's interest rates to ensure inflation remains under control.

Powell "stayed clear of commenting on the election outcome," Nationwide chief economist Kathy Bostjancic told AFP on Thursday. "But I do think as we get into 2025, they are going to have to consider that."

...