Trump Threatens Trade War If Fed Doesn't Lower Rates
President Donald Trump is demanding that the Federal Reserve lower interest rates, threatening to cut off US trade with countries that run trade surpluses unless his demand is met.
The jobs report for August showed a blowout employment figure of 162,000 new jobs, far above forecasts and a sharp rebound from July's loss of about 23,000 jobs. However, this strong labor market combined with above-target inflation makes the case for keeping rates high or raising them, not lowering them.
Trump's demand collides with his own economic officials' views, including National Economic Council Director Kevin Hassett, who said that the case for the Fed holding steady is 'pretty strong'. Cutting off imports from major suppliers would likely disrupt supply chains and push consumer prices up, not down.