What could interest rate cuts mean for the 2024 election?
ABC News
Rate cuts make borrowing less expensive, potentially boosting the economy.
When the Federal Reserve recently signaled interest rate cuts next year, the stock market soared to record highs and analysts voiced sunny hopes of a "soft landing."
Arriving less than a year before the presidential contest, the announcement raised a separate consideration: What the rate cuts could mean for President Joe Biden's reelection bid.
Analysts who spoke to ABC News said research shows that a strong economy benefits an incumbent presidential candidate, since voters factor their financial well being into an assessment of the leader's job performance.
But the implications of interest rate cuts are more complicated, the analysts added.
"A good economy benefits an incumbent," Ray Fair, a professor at Yale University who oversees a model that forecasts elections based on economic conditions, told ABC News. "A bad economy goes the other way."
