Trump's Rate-Cut Demands Clash with Strong Jobs Data at Fed
The latest US jobs report has strengthened the case for a Federal Reserve interest-rate hike, putting Fed Chairman Kevin Warsh in a difficult position ahead of the central bank's meeting on September 15-16.
The Bureau of Labor Statistics reported that employers added nearly three times as many jobs in August as economists had expected, with nonfarm payrolls surging by 162,000 jobs last month. The labor force participation rate rose to 61.6%, driven by a 300,000 jump in the number of people moving from the sidelines directly into a job.
This has heightened pressure on Warsh to raise interest rates and combat inflation, which has run above the Fed's 2% target for 5-1/2 years. However, President Donald Trump has intervened, tweeting that he won't allow high interest rates to put the US at an 'unfair disadvantage'.
'A STRONG COUNTRY MEANS A LOWER INTEREST RATE - IT'S A BETTER CREDIT…Very simple!' Trump said in a Truth Social post on Friday. He also threatened to stop trading with countries that have a deficit unless the Fed cuts rates.