President Trump threatened in a social media post on Friday to stop trade with some countries unless the US Federal Reserve moves to cut interest rates. This was reported by Qazaqyia.kz citing The Guardian.
Trump cited August’s strong jobs report as sufficient justification to lower rates, and warned that, if the central bank didn’t go along, he’d halt trade between the US and any nations with which it maintains a trade deficit.
“LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” Trump wrote in a Truth Social post, aiming the appeal directly at his handpicked new Federal Reserve chairman, Kevin Warsh.
“The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change,” Trump wrote.
The US runs a trade deficit – meaning it imports more goods from those nations than it exports to them – with dozens of countries, including some of its closest trading partners, among them Mexico, Canada and China.
Trump has long tried to lean on the US central bank to lower interest rates, a move that, according to conventional monetary policy wisdom, can stimulate economic growth but risks worsening inflation. Despite Trump’s pleas, Warsh has hinted the Fed may instead raise interest rates to curb inflation, which remains well above its target of 2%.
Warsh suggested the possibility of a rate hike during a speech at a summit in Jackson Hole, Wyoming, late last week. The Federal Reserve committee responsible for setting interest rate targets will meet on 15-16 September and announce whether the body will hike, maintain, or lower the current rate.