Trump threatens to cut trade with surplus countries if Fed doesn't cut rates
MacroDigital Finance Impact 4
President Donald Trump urged the U.S. Federal Reserve to cut interest rates, threatening to halt trade with countries that have trade surpluses with the U.S. if the Fed does not comply. This follows a stronger-than-expected August nonfarm payrolls report, which showed an increase of 162,000 jobs, surpassing analysts' forecast of 53,000, while the unemployment rate held steady at 4.1%. Trump posted on Truth Social that the U.S. should have the lowest interest rates in the world and threatened to stop trading with countries with which the U.S. has a trade deficit. He also said at the White House that the U.S. should pay interest of only 0.5-1% instead of 4%, citing Canada as an example, saying that if the U.S. did not trade with Canada, it would save $90 billion. Following the strong jobs data, markets increased the probability of a 0.25% rate hike by the Fed at its September 15-16 meeting to about 60%, according to CME Group's FedWatch.
