Trump Threatens Trade Cuts Over Fed Rate Hike Fears
The Labor Department's August jobs report exceeded expectations, showing that the US economy added 162,000 jobs. This strong labor market data has increased the probability of a quarter-point hike at the Federal Reserve's next meeting to over 58%, up from around 50% in the morning.
Federal Reserve Chairman Kevin Warsh has emphasized the need for price stability, and this latest indication of labor market strength may give central bankers more cover to restrict monetary policy. President Donald Trump responded with a social media post, threatening to cut trade if the Fed doesn't lower interest rates.
Trump argued that a strong country like the US deserves low interest rates, and that he has the right to stop trading with countries that have a deficit. He also mentioned that high interest rates put the US at an unfair disadvantage in global trade. The national average diesel price hit an all-time high of $5.85 on Friday, while the national average price for a gallon of regular gasoline was $4.14.