Trump Threatens to Halt Trade Unless Fed Cuts Rates Amid Strong Jobs Report
President Donald Trump has threatened to halt trade with countries that run trade deficits with the United States unless the Federal Reserve cuts interest rates. This threat comes after a stronger-than-expected jobs report, which showed the US economy added 162,000 jobs in August, triple the consensus estimate.
Trump made this statement on his Truth Social post on September 4, hours after the Labor Department released the jobs report. He said that if interest rates are not lowered, he will stop trading with countries that have a deficit with the US.
The unemployment rate held steady at 4.1%, prompting traders to boost bets on a Federal Reserve rate hike later this month to around 60% probability. Trump has been critical of trade deficits and high interest rates since taking office in January 2025, and his pressure on the central bank is not new.
Economists have warned that political interference with Fed independence could undermine the institution's credibility and trigger inflation. National Economic Council Director Kevin Hassett said that 'the Fed will do what it wants to do' and that 'we respect their independence', but argued that holding rates steady would be justified by recent economic data.