Trump expressed frustration that high domestic interest rates, which are governed by America’s Federal Reserve , placed the US at a “very unfair disadvantage”. US President Donald Trump threatened to cease trading with countries with which America has a trade deficit if the country’s central bank did not lower interest rates in a social media post on Friday.
Trump’s statement was linked to strong job growth numbers in August, with the employers adding an estimated 162,000 across the country.
The US President publicly called on Federal Reserve Governor Kevin Warsh and the central bank’s board to “get smart” and cut interest rates. A lower interest rate, Trump argued, was called for given America’s stronger economic position. In this context, Trump’s push for lower interest rates comes from the President’s belief that reduced borrowing costs will spur economic activity, investment and job creation ahead of the midterms. However, the US Federal Reserve retains independent authority to set interest rates. The central bank’s refusal to move interest rates in accordance with the President’s priorities has sparked frequent public criticism from President Trump during both his first and second terms.
Trump had a notably tense relationship with former Federal Reserve Chairman Jerome Powell, who demitted office earlier this year.
