Trump Threatens Trade War if Fed Doesn't Lower Rates After Strong Jobs Report

The US economy added 162,000 jobs in August, exceeding expectations and sending shockwaves through the financial markets. 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 Federal Reserve lowers interest rates.

In a tweet, Trump claimed that the US is a stronger credit than it was just a short time ago and should therefore have lower interest rates. He also suggested that the Fed Board must 'get smart' and prioritize the country's interests.

Trump's remarks came as the national average diesel price hit an all-time high of $5.85, according to AAA, while gasoline prices rose to $4.14 per gallon. The strong jobs report has increased the likelihood of a quarter-point hike in interest rates at the next Fed meeting from 50% to over 58%, according to CME FedWatch.

Federal Reserve Chairman Kevin Warsh has emphasized that price stability is the Fed's 'predominant focus', which may lead central bankers to restrict monetary policy and bring inflation down to their 2% target.