Trump Threatens Trade Retaliation Over Strong Jobs Report

The US economy added 162,000 jobs in August, exceeding expectations and strengthening the case for higher interest rates from the Federal Reserve. The strong jobs report sparked a rise in the probability of a quarter-point hike to over 58%, according to CME FedWatch. President Donald Trump responded by calling on the Fed to lower interest rates, citing the country's improved economic strength.

In a series of tweets, Trump warned that if the Fed doesn't act, he'll consider cutting off trade with countries running deficits against the US. He also claimed that high interest rates put the country at an unfair disadvantage and threatened to impose tariffs as a result. The White House Economic Council Director, Kevin Hassett, acknowledged that rising gas prices are causing anxiety for consumers.

The national average diesel price hit an all-time high of $5.85 per gallon on Friday, while gasoline averaged $4.14 per gallon. With inflation concerns already on the rise, the strong jobs report may give the Fed further justification to tighten monetary policy and bring inflation down to their 2% target.