The US rate cut could make people feel better before the 2024 presidential election.

The move by the U.S. Federal Reserve to lower interest rates by 0.5% could give people a psychological boost just a few weeks before the election in November 2024. This move might not have a big effect on the economy right now, but it could change people’s minds in a close race between Vice President Kamala Harris and past President Donald Trump. Analysts say that rate cuts might not have a big effect on the economy before Election Day, but they might boost consumer confidence, which is a big issue for voters. This could help Harris since the economy is still a big issue for Americans.

Rate cuts usually lower the cost of getting money, which makes people spend more. But it takes time for these kinds of policy changes to have an effect. Nancy Vanden Houten, a senior economist at Oxford Economics, says that the cut “might not show up in economic data” before the election. However, she thinks that it could “give consumer spirits a bit of a lift,” which could help Vice President Harris in a small way.

Even though this could make people feel better, Diane Swonk, head economist at KPMG, says that the Federal Reserve “doesn’t have a horse in the race” and that the real economic effects might not be felt until after the election. Some say the cut might not have much of an effect on how people actually vote, but in a close race, the idea that the economy is getting better could still play a part.

As the election gets closer, people are still thinking about things like work, pay, and the rising cost of goods. The Fed hopes that lower rates will make it easier for businesses to borrow money, which will help to create more jobs since unemployment is going up and job creation is slowing down. Gregory Daco, an economist at EY, warns, though, that the rate cut probably won’t be enough to move the economy in any one way before the election.

Since both of the main candidates are talking a lot about the economy, it’s still not clear what effect the Federal Reserve’s actions will have, but they could still change how people feel as the race heats up.