Trump Demands Rate Cut After Blowout Jobs Report
President Donald Trump reacted to the hotter-than-expected August nonfarm payrolls report by threatening to halt trade with countries running trade surpluses with the U.S., unless the Federal Reserve lowers interest rates. The U.S. economy added 162,000 jobs in August, nearly triple the consensus of 56,000, and July's reported loss of 23,000 was revised to a gain of 21,000.
Trump demanded that the Fed lower interest rates or he would stop trading with countries with which the U.S. has a deficit. He said a strong country means a lower interest rate because it is a better credit, and the U.S. should have the lowest rate of any country in the world.
The Federal Reserve's dual mandate covers maximum employment and price stability. With payrolls running at five times the prior year's 31,000 monthly average, the unemployment rate steady at 4.1%, and the workweek lengthening, the employment side of that mandate is not sending a distress signal. Headline PCE inflation ran 3.7% year-over-year in July and core PCE 3.3%, against a 2% goal.