President Donald Trump threatened to cut off trade with any nation with which the U.S. runs a trade deficit if the Federal Reserve does not lower interest rates.
Trump made the comments after the Bureau of Labor Statistics reported the U.S. added 162,000 jobs in August, signaling continued strength in the labor market. Trump has long pushed for lower interest rates, but a strong jobs report typically makes rate cuts less likely.
RELATED STORY | Private-sector hiring hit the brakes in August with just 38,000 jobs added
The Federal Reserve aims to keep inflation at an annual rate of 2%. Higher interest rates generally help slow inflation, though they can also weaken the job market. With inflation at 3.4% annually and job growth remaining solid, the Fed appears more likely to hold rates steady — or potentially raise them — than to cut them.
“Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE - IT’S A BETTER CREDIT … Very simple,” Trump wrote on Truth Social.
“Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE! LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged ‘the President’ has an absolute right to do,” Trump added. “IT’S BETTER THAN TARIFFS!”
RELATED STORY | August hiring beats recent trend while unemployment holds at 4.1%
The Federal Reserve’s next meeting is Sept. 15-16, when policymakers will decide whether to adjust interest rates. The federal funds rate has remained unchanged since December.
Since then, Trump-appointed Federal Reserve Chair Kevin Warsh has taken the helm. Although Warsh previously differed with predecessor Jerome Powell on interest rate policy, the Fed has not changed rates since Warsh became chair in May.
