Trump Threatens Trade Halt If Fed Doesn't Cut Rates
President Donald Trump has threatened to halt trade with countries that run a deficit with the US if the Federal Reserve does not cut interest rates. In a social media post, he said this would make those countries 'no longer be considered financially ELITE!' The president cited the strong August jobs report as rationale for his demand.
Trump nominated Kevin Warsh to lead the Fed in January and has praised him since. However, he has not directly criticized Warsh's rate decisions. Instead, he has targeted other central bank policymakers, accusing them of having a political bias.
Economists believe the improving labor market actually bolsters the case for a Fed rate hike in September. The CME FedWatch tool shows 60% odds of a rate hike and 40% chances of no action by the Fed. The rate of inflation has been above the central bank's target for over five years, registering a 12-month gain of 3.7% in July.