Trump Demands Fed Lower Rates Amid Strong Jobs Report
US President Donald Trump has intensified pressure on the Federal Reserve to lower interest rates. In a social media post, he threatened to cut off trade with countries that have a deficit with the US if the Fed doesn't act. The move is seen as a resumption of his pressure campaign against the Fed, which had been pulled back after Kevin Warsh took over from Jerome Powell as chairman.
Trump's approval ratings have plummeted ahead of November's midterm elections, and he is trying to boost the economy before then. He claims that high interest rates put the US at a disadvantage and wants to see borrowing costs fall to 1% or lower. However, it's unclear how cutting off trade with certain economies would help lower US borrowing costs.
Trump also defended his threat to cut off trade with countries like Switzerland, Mexico, and the European Union, saying that they benefit from their ties with the US and would be bankrupt without them. He pointed out that the US has a deficit with these countries, but added that it's his right to put tariffs on them.
The Fed is set to meet next week to discuss interest rates, and investors have boosted bets on a rate hike in response to the strong August jobs report. Trump, however, wants the Fed to lower rates, saying that 'we should not be at 4%.'