Donald Trump’s crusade to cut interest rates took a bizarre new turn on Friday when he threatened to cut off trade with some unnamed countries if the Federal Reserve doesn’t do his bidding.
The president’s ultimatum came after the release of a surprisingly strong jobs report.
His brag about the better-than-expected jobs market on Truth Social quickly morphed into a capital-letter rant about why the United States doesn’t have the world’s lowest interest rates.
“Great jobs number just announced, breaking all estimates (except mine!) by double and triple—And you haven’t seen anything yet! EMPLOYERS ADDED 162,000 JOB IN AUGUST,” he wrote.
“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! We should have the LOWEST RATE of any country in the World, like ‘the old days.’ 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 ramped up the pressure on his new Fed chair, Kevin Warsh, to act and cut rates.
“IT’S BETTER THAN TARIFFS! The Fed Board, with its great new leader, must get smart—BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!”
The countries the U.S. has a deficit with include China, Canada, Mexico, and European Union nations, with the goods-and-services gap widening to its biggest in 16 months in July.
Trump instituted his tariffs to try and close that gap, and hasn’t forgiven the Supreme Court for shutting them down.
Trump finally got his way and replaced Jerome Powell with Warsh, but the Fed has continued to resist the president’s demands for an interest cut, keeping rates steady since last December. Economists suggest the Fed may act as soon as later this month to counteract inflation.
Friday’s jobs report suggests that employers have moved past concerns about the Iran war and AI to grow the workforce.
The Labor Department reported an addition of 162,000 jobs, and the unemployment rate held firm at 4.1 percent, the same as July.
June and July job gains were revised up by 55,000.
