Survey Finds Majority of Americans Want a Fed Rate Cut
When the Federal Reserve meets this week, for the first time in months the big question will not be whether or not they’ll raise interest rates but whether they might cut them. According to the personal finance site WalletHub, there’s a 23% chance they do so during their next session, with that probability increasing to 87% by July and 97% by September. If they do, it will be the first time the agency has cut rates since the Great Recession. While the markets have shown an appetite for such a move, what do average Americans think?
Recently WalletHub surveyed individuals to get their thoughts on a potential Fed rate cut. What they found was that more than three-quarters of respondents supported a decrease in rates. Additionally 58% said that the move would be good for the economy while 68% said it would be good for their wallets.
WalletHub’s survey does contain what, on some level, appear to be contradictions on the part of its respondents. For example two-thirds said that the Federal Reserve has a better grasp on what’s good for the economy than President Trump does yet 73% said they agree with the President that rates should be cut. While there’s room for nuance in that — since the Fed is largely expected to cut rates this year anyway — it is interesting nonetheless. Also notable is that only 10% said a rate cut would make them less confident in the U.S. economy with just under half (49%) saying it would increase their confidence.
As mentioned any cut in target rates by the Fed would mark the first decrease in years. Instead the agency has increased rates nine times since late 2015. This has famously infuriated President Trump who has openly criticized his appointee Jerome Powell. Although Powell’s Fed has pressed on with their plans despite political pressure, slowing economic indicators such as GDP growth and jobs added previously changed the agency’s plans to raise interest rates further.
If a rate cut were to occur, it’s unclear exactly what impact that would have on Americans’ finances or the economy at large. That said credit card interest rates should dip, which WalletHub suggests would potentially save cardholders $1.6 billion. Not surprisingly 76% of those surveyed told WalletHub they felt current credit card APRs were too high (something Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez would agree with).
After months of bashing the Fed, it seems that President Trump will likely get his way soon enough. Although it may not happen this week, signs point to a rate cut sometime this year. If so, WalletHub’s finding would suggest that the majority of Americans would celebrate the change. Could a rate cut keep the economic expansion and maybe even win the President a second term? Stay tuned.