Trump Threatens Trade Cuts Over Federal Reserve Interest Rate Stance
President Trump has increased pressure on the Federal Reserve to lower interest rates, threatening trade cuts with countries that have a deficit with the US. In a social media post, Trump pointed out the strong August jobs report and stated that 'A STRONG COUNTRY MEANS A LOWER INTEREST RATE - IT'S A BETTER CREDIT…Very simple! We should have the LOWEST RATE of any country in the World, like “the old days.”
Trump threatened to cut off trade with countries with which the US has a deficit if the central bank fails to act. This comes amid speculation that Fed officials might raise interest rates at their next policy meeting starting 15 September.
The jobs report showed nonfarm payrolls increased 162,000 last month and July's job losses were revised away, suggesting the labor market has more momentum than previously thought. However, with persistently high inflation, but divided over how monetary policy should respond in the near term, new evidence of price pressures could tilt the Federal Open Market Committee into a rate hike.