President also heralds progress on inflation and interest rates, but says work still ahead
In a speech Thursday following the Federal Reserve's interest-rate cut, President Joe Biden talked up the importance of the U.S. central bank's independence while criticizing Republican presidential nominee Donald Trump's stated desire to wield more influence over the Fed.
Biden also celebrated the rate cut's significance but stressed that his administration's inflation-fighting efforts aren't over, as White House officials had promised he would.
"Unlike my predecessor, I respect the Federal Reserve's independence," Biden said in remarks at the Economic Club of Washington, D.C. "That independence has served the country well. By the way, I've never once spoken to the chairman of the Fed since I became president. It also would do enormous damage to our economy if that independence is ever lost."
Last month, Trump called for a greater say on the Fed's decisions if voters were to return him to the White House, claiming that the central bank has "gotten it wrong a lot." In addition, some Trump allies have floated proposals to erode the central bank's independence.
Meanwhile, Democratic presidential nominee Kamala Harris believes the Fed should make decisions independent of the president and Trump, a Harris aide told MarketWatch last month. Harris replaced Biden at the top of the Democratic ticket after the president bowed out of the White House race in July.
During Thursday's speech, Biden also said the Fed's rate cut on Wednesday is "an important signal" that after repeated rate hikes to cool down inflation, inflation has come back down, and the central bank has "switched to lowering rates to keep the country growing."
"I'm not here to take a victory lap," Biden added. "We do have more work to do."
White House officials had made similar remarks as they gave a preview of the president's speech.
"President Biden is going to speak to a new milestone - inflation and interest rates are falling, [and] at the same time, employment, wages and GDP are rising," Jeff Zients, Biden's chief of staff, told reporters.
"I want to be really clear: This is not meant to be a declaration of victory," Zients added. "It's meant to be a declaration of progress - significant progress. The president believes it's important to mark this moment for the country by laying out how far we've come, while also outlining the work we still have to do."
Top Biden economic adviser Lael Brainard said the U.S. central bank's actions "send a clear signal that inflation has come back down, interest rates are coming down, and the focus now is on sustaining the important gains on employment and incomes."
Trump offered a different take on the rate cut of half a percentage point, as he suggested the Fed might be getting political ahead of November's elections.
"I guess it shows the economy is very bad to cut it by that much, assuming they're not just playing politics," the former president told reporters Wednesday. "The economy would be very bad, or they're playing politics - one or the other. But it was a big cut."
Harris called the Fed's announcement "welcome news" for Americans who have struggled with high prices, but quickly turned to touting what she would do as president to tackle costs.
U.S. stocks SPX DJIA COMP finished lower Wednesday after choppy trading in the wake of the Fed's decision to lower its benchmark interest rate by 50 basis points, an aggressive start to its monetary-easing cycle. On Thursday, the main equity benchmarks were trading sharply higher.
-Victor Reklaitis
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