Is the Fed about to wave the white flag on inflation? The central bank looks on track next week to lower interest rates even as the pace of price increases is running, on an annual basis, some 25 percent above the Fed’s own 2 percent target. That’s per the August reading of the Consumer Price Index, which rose 2.5 percent, while core prices jumped 3.2 percent, over last year. It’s hard, by our lights, to see why the Fed is in such an all-fired rush.

It’s not that we are of a mind to tell the Fed how to run its business. Careful readers of these columns will note that the Sun avoids advising the Fed where to put its interest rates. It has hundreds of economists at its beck, and the editor of the Sun is always warning readers not to take financial advice from a newspaperman. We tend to view all this, though, through the eye of the political typhoon, the electoral calendar, and the Constitution.

We were the first paper to publish, last December, Judy Shelton’s column cautioning readers to expect a move on interest rates as early as September, in time to signal that President Biden had brought inflation under control before the end of his term. The concern raised by Ms. Shelton centered on whether any Fed action on interest rates in an election season could not, despite the central bank’s pretensions of independence, take on a political element.

Ms. Shelton weighed the question with due tact. She noted that “the presumption of independence between the actions of the nation’s central bank and the economic agenda of the White House” made it “crude to ask” whether Chairman Powell & Co.  “could end up choreographing an economic boost that serves to help the incumbent presidential candidate.” Liberals like Paul Krugman had no such qualms in advocating precisely such a course.

If Ms. Shelton feared the politicization of monetary policy, Mr. Krugman welcomed it. “The war on inflation is more or less over, and we won,” he crowed as 2024 began, even as annual inflation was running at 3.1 percent and core prices surging 4 percent. The goal was to help Mr. Biden’s re-election, Mr. Krugman contended, and “Fed rate cuts will help him with that.” Even though the candidate has changed, the Fed seems to have gotten the message.

Yet trimming interest rates without conquering inflation raises the risk of a resurgence of price increases under a more accommodative Fed policy. That would add insult to injury for consumers already reeling from the cumulative impact of the Biden-Harris inflationary wave. Prices on average have surged some 20 percent since President Trump’s term in office. Basic staples like eggs and sugar are up 40 percent. Bread costs 46 percent more.

It would have been nice to hear about this from Vice President Harris during the debate, but she doesn’t know any more about interest rates than the Man in the Moon. The point that President Trump, who does understand interest rates, has been making is that he’s determined to protect the dollar’s status as the world’s leading reserve currency. We’re not entirely on board with his high esteem for the fiat dollar — the real natural reserve currency is gold. 

Yet we understand Trump’s concern over the collapse of the dollar, which under Mr. Biden has reached a record low in terms of the historical basis of monetary value. As recently as January 2001, the dollar fetched a 265th of an ounce of gold. In recent weeks the dollar has plunged below a 2,500th of an ounce of the monetary metal. Nor has any candidate dast address this catastrophe in respect of our Federal Reserve Notes.

That is what troubles us in the wake of the Trump-Harris debate. It seems in the cold light of dawn that Ms. Harris is proposing another debate. Mr. Trump has been a bit cagier. What we’d like to see is a debate over what is being signaled by the collapse in the dollar to less than a 2,500th of an ounce of gold and what is the next president going to do about it? That would be a debate that would have us on the edge of our chair.