Trump Threatens Trade Retaliation Over Potential Interest Rate Hike
The US economy added 162,000 jobs in August, exceeding expectations and sparking concerns about higher interest rates from the Federal Reserve. President Donald Trump responded to the strong jobs report by threatening to cut trade with countries that have a deficit with the US unless the Fed lowers interest rates.
According to CME FedWatch, the probability of a quarter-point hike rose from 50% to over 58% after the jobs report was released. This increase in the likelihood of higher rates may give central bankers cover to restrict monetary policy and bring inflation down to their 2% target.
Trump took to social media to express his frustration, stating that a strong country like the US should have low interest rates. He claimed that high interest rates put the US at an unfair disadvantage and threatened to stop trading with countries that have a deficit with the US unless the Fed lowers rates.