WASHINGTON (AP) — No one knows how Tuesday’s presidential election will play out, but the Federal Reserve’s move two days later is much easier to predict: With inflation continuing to coolThe Fed is set to cut interest rates to a the second time this year.

The presidential contest may still be unresolved when the Fed ends its two-day meeting on Thursday afternoon, but that uncertainty would have no effect on its decision to cut its benchmark rate further. The Fed’s future actions, however, will become more volatile once the new president and Congress take office in January, especially if Donald Trump were to win the White House again.

Trump’s proposals to impose high tariffs on all imports and launch mass deportations of unauthorized immigrants and his threat to intervene in the Fed’s normally rate-independent decisions could push inflation higher, economists said. Higher inflation would in turn force the Fed to slow or stop rate cuts.

On Thursday, Fed policymakers, led by Chairman Jerome Powell, are on track to cut their benchmark rate by a quarter point to about 4.6 percent, after implementing a half-point cut in September. Economists expect another quarter-point rate cut in December and possibly more such moves next year. Over time, rate cuts tend to lower borrowing costs for consumers and businesses.

The Fed is cutting interest rates for a different reason than it usually does: It often cuts rates to stimulate a sluggish economy and weak labor market by encouraging more borrowing and spending. But the one the economy is growing rapidlyand the unemployment rate is a minimum of 4.1%the government reported Friday, even with hurricanes and a strike at Boeing net job growth severely depressed last month.

Instead, the central bank is cutting rates as part of what Powell called “a recalibration” to a lower inflation environment. When inflation rose to a four-decade high of 9.1% in June 2022, the Fed went on to raise rates 11 times — ultimately sending the key rate to around 5.3%, also the highest in the last four decades.

But in September, year-on-year inflation fell to 2.4%just above the Fed’s 2 percent target and equal to its level in 2018. With inflation subdued so far, Powell and other Fed officials have said they believe high borrowing rates are no longer necessary. High borrowing rates typically limit growth, especially in interest rate-sensitive sectors such as housing and car sales.

“The restriction was in place because inflation was rising,” said Claudia Sahm, chief economist at New Century Advisors and a former Fed economist. “Inflation is no longer high. The reason for the restriction is gone.”

Fed officials have suggested their rate cuts would be gradual. But almost all expressed support for some additional cuts.

“For me, the central question is how much and how quickly to cut the (Fed’s key) rate target, which I think is currently set at a restrictive level,” Christopher Waller, an influential member of the Fed’s Governing Council , he said in a speech last month.

Jonathan Pingle, an economist at Swiss bank UBS, said Waller’s wording reflected “unusual confidence and a belief that rates are headed lower.”

Next year, the Fed will likely begin to wrestle with the question of how low the benchmark rate should go. Ultimately, they may want to set it at a level that neither restricts nor stimulates growth—”neutral” in Fed parlance.

Powell and other Fed officials admit they don’t know exactly where the neutral rate is. In September, the Fed’s rate-setting committee estimated it was 2.9%. Most economists think it’s closer to 3% to 3.5%.

The Fed chairman said officials need to gauge neutral based on how the economy reacts to interest rate cuts. For now, most officials are confident that, at 4.9%, the Fed’s current rate is well above neutral.

Some economists argue, however, that with the economy looking healthy, even with high borrowing rates, the Fed doesn’t need to ease credit much, if at all. The point is that they may already be close to the level of interest rates that neither slows nor stimulates the economy.

“If the unemployment rate stays at 4 and the economy continues to grow at 3 percent, does it matter that the (Fed) rate is 4.75 percent to 5 percent?” Joe LaVorgna, chief economist at SMBC Nikko Securities, asked. “Why are you cutting now?”

With the Fed’s latest meeting coming just after Election Day, Powell is likely to answer questions at his press conference on Thursday about the outcome of the presidential race and how it could affect the economy and inflation. He can be expected to reiterate that the Fed’s decisions are not affected by politics at all.

During Trump’s presidency, he imposed tariffs on washing machines, solar panels, steel and a host of goods from China, which President Joe Biden maintained. Although studies show that washing machine prices have increased as a result, overall inflation has not increased much.

But Trump is now proposing much broader tariffs — essentially import taxes — that would raise the prices of about 10 times more goods from overseas.

Many mainstream economists are alarmed by Trump’s latest proposed tariffs, which they say would surely reignite inflation. A report by the Peterson Institute for International Economics concluded that Trump’s main tariff proposals would increase inflation by 2 percentage points next year than it would have been otherwise.

This time around, the Fed may be more likely to raise rates in response to tariffs, according to economists at Pantheon Macroeconomics, “given that Trump is threatening much larger rate hikes.”

“Accordingly,” they wrote, “we will reduce the funds rate cut in our 2025 projections if Trump wins.”