Last month, prices fell to their lowest levels almost two years. The June Consumer Price Index (CPI) dropped to 3.0% annually–down from 3.4% the prior month—and is now on the verge of hitting the Federal Reserve’s inflation target of 2%.
Almost immediately after the release of the CPI data, Republicans warned the Federal Reserve not to cut rates prior to the election in November. After Fed Chair Jerome Powell testified before the Senate Banking Committee Senator Kevin Cramer (R-N.D.) argued that “I personally don’t think they should…anything they do before November would be rightfully—would raise the question of their own independence.”
But will the Fed heed the call from Republicans to keep rates at their current level when its Federal Open Markets Committee meets on July 31 and September 18? Based on past history, the answer is a resounding no (assuming economic conditions require action).
