{"id":852869,"date":"2026-09-19T04:36:37","date_gmt":"2026-09-19T04:36:37","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/852869\/"},"modified":"2026-09-19T04:36:37","modified_gmt":"2026-09-19T04:36:37","slug":"how-the-feds-rate-decisions-could-hurt-gop-chances-in-the-midterms","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/852869\/","title":{"rendered":"How the Fed\u2019s rate decisions could hurt GOP chances in the midterms"},"content":{"rendered":"

\n A version of this story appeared in CNN\u2019s What Matters newsletter. To get it in your inbox, sign up for free here<\/a>.\n<\/p>\n

\n The Federal Reserve is raising interest rates to fight inflation that hurts Americans\u2019 pocketbooks, but the move may also make voters feel the pinch in other ways heading into the November election.\n <\/p>\n

\n There may not be a direct tie between the interest rates set by the Fed and mortgage and auto lending rates. But the Fed\u2019s decision certainly won\u2019t bring down the cost of housing, buying a car or paying off credit card debt. It won\u2019t make it easier for American farmers already contending with record diesel prices<\/a> and a surge in fertilizer costs to afford increased interest payments, all of which led the USDA this week<\/a> to forecast a reduction in farm income for the year.\n <\/p>\n

\n It is also designed to slow down the economy<\/a>, something voters might not enjoy experiencing if it leads to jobs cuts.\n <\/p>\n

\n While President Donald Trump opposed the rate hike, he\u2019ll have to answer for any economic impact, even if his war on Iran and tariff policy helped create the inflation that led to it.\n <\/p>\n

\n Trump has long groused about interest rates and elections.\n <\/p>\n

\n He complained when rates were raised during his first term<\/a>. And he complained when they were lowered before the 2024 presidential election<\/a>. Earlier in his second term Trump publicly fantasized about firing the previous Fed Chair, Jerome Powell, but ultimately let his term as chairman expire and nominated Kevin Warsh, who Trump in January described as coming from \u201ccentral casting\u201d<\/a> for the job.\n <\/p>\n

\"Screens<\/p>\n

\n But while the unanimous decision by the Federal Open Markets Committee<\/a> Wednesday to raise rates will keep Trump at odds with Fed policy, it also shows that Warsh lives in the reality where inflation and higher costs continue to be a problem for the economy as a whole, and not in Trump\u2019s reality, where inflation does not exist.\n <\/p>\n

\n And Warsh\u2019s Fed is expected to raise interest rates again this year. The next opportunity is in late October, just before Election Day.\n <\/p>\n

\n At a press conference Wednesday, Warsh acknowledged the reality that Americans feel every day.\n <\/p>\n

\n \u201cThis summer\u2019s inflation readings do not tell me that underlying trends have meaningfully improved,\u201d he said, arguing inflation has been hurting the country for five years.\n <\/p>\n

\n During his convention speech to Republicans last week in Dallas, Trump said \u201calmost every item\u201d<\/a> is getting cheaper.\n <\/p>\n

\n After the Fed\u2019s decision Wednesday to raise rates, Trump, without mentioning Warsh, painted a picture of his own reality. He said on social media<\/a> that rates should be much lower because the US economy is \u201cBOOMING.\u201d And he seemed to reiterate that if rates don\u2019t come down, he\u2019ll try to cut off a large portion of US trade<\/a> with the rest of the world.\n <\/p>\n

\n Even Vice President JD Vance seemed to acknowledge in a podcast interview Wednesday that things aren\u2019t exactly going to plan.\n <\/p>\n

\n \u201cGive us another chance,\u201d Vance said, when asked for his message to voters before November.\n <\/p>\n

\n The rate cut may be the Fed\u2019s best, and really only, tool available to combat inflation, but it\u2019s a blunt instrument, according to John W. Diamond,<\/a> director of the Center for Public Finance at the Baker Institute at Rice University.\n <\/p>\n

\n \u201cThat means the rate increase may further slow the weaker parts of the economy, such as housing<\/a>, while barely affecting the strongest, namely the relentless investment<\/a> in artificial intelligence,\u201d he wrote for The Conversation<\/a>.\n <\/p>\n

\n Trump\u2019s defense of AI development and data centers<\/a> is another issue that puts him at odds with many voters.\n <\/p>\n

\n Trump and Republicans harnessed anger over inflation and worries about the economy to send Democrats packing in the 2024 elections.\n <\/p>\n

\n Now, they have to answer for the fact that the GOP\u2019s two years in power haven\u2019t solved the problem, at least not in the eyes of voters.\n <\/p>\n

\n Democrats have a clear advantage to retake the House of Representatives, according to a recent New York Times \/ Siena poll.<\/a>\n <\/p>\n

\n Not surprisingly, the economy and inflation were among the top issues cited by registered voters in that poll. The problem for Trump is that he has lost their support on those issues.\n <\/p>\n

\n Three-quarters of registered voters say the economy is only in fair or poor condition; 73% disapprove of his handling of cost-of-living issues, and 62% disapprove of his handling of the economy in general.\n <\/p>\n

\n House Minority Leader Hakeem Jeffries, Democrat of New York, might as well have been reading from that New York Times poll when he opened a recent news conference arguing that Trump promised a \u201cgolden age,\u201d but delivered a \u201crotten age.\u201d\n <\/p>\n

\n \u201cThe economy is not going in the right direction, it is failing everyday Americans. Gas prices are up, grocery prices are up, interest rates are up, housing costs are up, and health insurance premiums are up,\u201d Jeffries said.\n <\/p>\n

\n Those economy numbers have a lot to do with why Democrats feel competitive in Senate races that once seemed safe for Republicans, particularly in heartland states like Kansas and Iowa. Democratic candidates like Rev. Adam Hamilton in Kansas and Josh Turek in Iowa are making populist pledges to focus on housing and energy prices. In Iowa, the Republican candidate Rep. Ashley Hinson is talking in ads about working across the aisle, not a very Trump message.\n <\/p>\n

\n Trump made promises to bring down costs two years ago, but the policies he pursued as president probably aren\u2019t helping inflation.\n <\/p>\n

\n \u25ba Fighting AI regulation has given Big Tech room to spend. Enormous borrowing and spending by AI companies has fueled significant inflation in chip prices, electricity and building supplies.\n <\/p>\n

\n \u25ba Tariffs he promised and defended have made things more expensive. But rather than pull back, Trump is launching a trade war with Canada.\n <\/p>\n

\n And the actions he has taken to address inflation have often angered his supporters<\/a>. The Republicans running for Senate in Iowa (Hinson) and Kansas (Sen. Roger Marshall) both channeled ranchers when they expressed frustration with Trump\u2019s decision to import more beef as a way to bring down meat prices.\n <\/p>\n

\n \u25ba His war on Iran has fuel costs rising again. Iran-backed Houthis in Yemen have attacked oil infrastructure in Saudi Arabia. The price of diesel is at a new record, hurting farmers, the trucking industry and ultimately consumers<\/a>.\n <\/p>\n

\n \u25ba High prices are expected to continue. The Congressional Budget Office set the cost of the war at $38 billion and counting in a report released this week<\/a>. Perhaps more importantly to American consumers is that CBO expects the war to drive up inflation next year, a bet that fuel prices aren\u2019t coming down any time soon, counter to Trump\u2019s assurances<\/a>.\n <\/p>\n

\n \u25ba Trump also wants to cut $5,000 checks<\/a> to every American. His administration is looking for ways to do it without Congress. People would appreciate the check, surely, but it would also drive up prices.\n <\/p>\n

\n This is the dichotomy of \u201cAmerica First.\u201d Trump wants lower rates. But his presidency is built around a list of policies that, at least on paper, drive up costs.\n <\/p>\n

\n Trump ultimately turned on his first-term pick for Fed Chair, who he later viewed as a \u201cjerk\u201d for not lowering rates on Trump\u2019s timeline or bowing to Trump\u2019s constant pressure.\n <\/p>\n

\n Who knows if Trump continues to pressure Warsh to lower rates. In an angry social media post after the Fed\u2019s announcement, Trump said rates should be at 1% rather than targeted between 3.75% and 4% as the Fed made clear.\n <\/p>\n

\"Federal<\/p>\n

\n Trump said he did talk to Warsh before the Fed\u2019s meeting.\n <\/p>\n

\n \u201cI talked to Kevin and I said, \u2018you might as well vote with the board because it\u2019s not going to matter.\u2019\u201d\n <\/p>\n

\n Warsh, as chairman, is but one vote on the Fed board that set rates. But Warsh kept any counsel from Trump private.\n <\/p>\n

\n \u201cI\u2019ve got nothing for you on a discussion with the president,\u201d he told reporters.\n <\/p>\n

\n Warsh may yet hold Trump\u2019s trust because at heart he is thought to support rate cuts. It\u2019s just that the economic reality, at the moment, is that prices are rising.\n <\/p>\n

\n CNN\u2019s David Goldman contributed to this report.\n <\/p>\n","protected":false},"excerpt":{"rendered":"A version of this story appeared in CNN\u2019s What Matters newsletter. To get it in your inbox, sign…\n","protected":false},"author":2,"featured_media":852870,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-852869","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/852869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=852869"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/852869\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/852870"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=852869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=852869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=852869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}