Trump Threatens Global Trade Unless Fed Cuts Rates to Record Low

President Trump issued an ultimatum to the Federal Reserve on Friday, threatening to cut off a large portion of U.S. trade if interest rates aren't lowered. This warning comes despite the Fed's efforts to combat stubborn inflation, which has persisted for years.

The threat was made after the release of new jobs data showed employers added roughly 162,000 positions in August, indicating that the labor market is holding up despite ongoing trade disruptions and escalating conflicts with Iran. Trump celebrated this news on social media before pivoting to renew his pressure campaign, demanding the Fed cut rates to the lowest level of any country in the world.

The Fed has kept rates unchanged since December as it tries to determine whether recent economic instability is temporary or signals longer-lasting inflationary pressure. In fact, Fed officials have hinted they may raise rates as soon as this month, having failed for more than five years to bring inflation down to their 2 percent target.

Trump argued that the economy is strong enough to handle lower borrowing costs, even though such a move could push inflation higher. He indicated that without a rate cut, he might disrupt global trade instead, citing a Supreme Court tariff ruling that affirms his authority to do so.