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At
the end of July the Fed kept the policy rate in the same
5.25%-5.50% range it has been for more than a year, but signaled
that a rate cut could come as soon as September if inflation
continued to cool.
"They've told people rates probably aren't going to go up, but
if they don't start taking them down relatively soon, you could
dispirit the American consumer," Moynihan told CBS in an
interview.
"Once the American consumer really starts going very negative,
then it's hard to get them back."
Moynihan, pressed about Republican candidate Donald Trump's
statement that presidents should have a say over Fed decisions,
said people were free to give Federal Reserve Chair Jerome
Powell advice and it was then his job to decide what to do.
"If you look around the world's economies and you see where
central banks are independent and operate freely, they tend to
fare better than the ones that don't," he said.
(Reporting by David Ljunggren in Ottawa; Editing by Matthew
Lewis)
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