Trump Threatens Trade Boycott Unless Fed Cuts Rates Amid Strong Jobs Data

US President Donald Trump has threatened to halt trade with countries that run deficits against the US unless the Federal Reserve (Fed) cuts interest rates. He cited strong August jobs data, which showed employers added 162,000 jobs last month, as a reason for his demand.

In a Truth Social post, Trump wrote, 'LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,' and he added that 'High interest rates put the U.S.A. at a very unfair disadvantage, and I won't allow that to happen!' The threat came as traders boosted bets on a rate hike later this month after the stronger-than-expected job creation in August.

The Fed has held rates steady at a range of 3.5 to 3.75 percent at its last five meetings, while inflation remained above the central bank's 2 percent target. Trump directed his pressure at Fed Chairman Kevin Warsh, whom he called 'great' and urged the Fed Board to 'get smart' and 'BE PATRIOTS for a change.'

Warsh had previously said, 'Otherwise, we have work to do,' if underlying inflation is not moving toward the bank's 2% target. The New York Times cautioned that Trump's demand risked undermining the Fed's politically independent work and could 'choking off commerce' in ways that could harm American families and businesses.