The Federal Reserve's widely anticipated rate cuts on Wednesday could be a well-timed political boost for Vice President Kamala Harris if voters sour about the economy under the Biden administration see relief.
The Fed is expected to lower its benchmark rate, which sits at a 23-year high, on Wednesday at about 2 p.m. The reduction will mark the Fed's first since unleashing a flurry of rate hikes to address coronavirus-linked inflation, and experts predict a rate cut of 25 to 50 basis points.
The move will not only provide some relief for consumers saddled with credit card debt and new homeowners or auto buyers but will likely trigger a series of rate reductions through the end of the year and beyond.
The economy remains the top issue for voters heading into the general election in November, and economists and veteran Democratic strategists agree that Harris stands to benefit from Wednesday's cuts, though they disagree on the breadth of the political impact.
Mark Hamrick, the senior economic analyst at Bankrate, told the Washington Examiner that perceptions of Harris's economic stewardship won't "change overnight with one rate cut" but that she should see some bounce if prices decrease.
"The reality is that the number of people who are undecided in this race is not huge, but when you're talking about slim margins, that percentage is significant," he said in an interview. "The question is, 'Is the level of interest rates essentially a trigger for perception about the quality of the economy?'"
"It's no secret that it's a highly polarized political environment, so anything that lends some possibility of a positive input on the way that not only things are perceived but the way they actually are is helpful for an incumbent to the degree that she's viewed as an incumbent," Hamrick continued. "The high level of awareness about who she is gets an assist from things that change because until a couple of months ago, no one understood that she was a candidate for president."
Skanda Amarnath, the executive director of Employ America, argued that forecasts have predicted rate cuts for months, and those "assumptions" are already "baked in" to voters' perception of the economy.
He told the Washington Examiner that Wednesday's announcement "shouldn't have a huge impact" politically but conceded that "disappointment" from an underwhelming announcement and future forecast could be bad news for the vice president.
"All economists and all financial market strategists can tell you the story of how that disappointment causes stocks to fall, the Fed has to come clean up. There's extra volatility in the market," he explained. "That leads to more reporting and stories about recession risk or economic uncertainty, that would probably be a little bit less favorable for the incumbent."
Democratic strategists with close ties to Harris's campaign gave blunter, more political answers to how a rate cut would affect the election.
"I've been saying this for years. The Biden-Harris economic agenda is working, but it takes time to feel the effects," one strategist explained.
"It just makes it that much easier to pitch the vice president's economic agenda to voters, especially when the other side is focusing on cutting taxes for the superrich and raising costs even more for everyday American households," a second strategist added.
Any boost in public perception of Harris's economic policies would be welcome news for her campaign.
Though the vice president has steadily opened up a lead over former President Donald Trump in national, battleground, and general temperament polling , she lagged significantly behind the former president among voters when it came to economic stewardship.
Harris's economic platform, the broad strokes of which she debuted last month, has received mixed reviews.
Proposals to cap rent and provide first-time homebuyers with $25,000 in federal assistance were generally panned by experts, but her proposed tax deduction for the construction of 3 million new starter homes has been received favorably.
Harris was further saddled with trying to both take credit for and distance herself from President Joe Biden's own unpopular economic stewardship
However, her economic polling started to turn in the immediate aftermath of her September debate with Trump.
A Financial Times-Michigan Ross poll published Sunday found Harris outperforming her rival by 2 points when it comes to economic stewardship. That lead expanded to 6 points among survey participants who say they watched all or parts of the Trump debate.
A Forbes-HarrisX poll taken in the two days after the debate and published Tuesday showed survey participants being split evenly on who "demonstrated a better grasp" on economic policy during the debate, but it gave Harris the edge when it came to detailing specifics of economic proposals.
Just 60% of respondents said that Trump gave "no information or very little" about how he will tackle inflation, with 65% saying the same about his general economic plan. For comparison, 58% and 69% wanted to hear more from Harris on inflation and the economy, respectively.
The Harris campaign did not comment for this story.
The Trump campaign and its allies, meanwhile, maintain that the Biden-Harris agenda is responsible for the current inflation and high interest rates.
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"Kamalanomics has led to the fastest increase in mortgage rates since 1981, and only President Trump can restore economic growth after four years of failure," Republican National Committee spokeswoman Anna Kelly told the Washington Examiner.
"Kamala Harris wants more of the same 'high cost of energy' policies that led to a housing affordability crisis and crippling inflation for families across the country, but President Trump will cut energy prices in half in 12 months and declare a national energy emergency to quickly bring down mortgage and interest rates," she said.
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