Overview
- President Trump posted the demand on Friday after the August jobs report, saying he will stop trading with countries that run deficits with the United States unless the Federal Reserve lowers rates.
- The August report showed employers added 162,000 jobs with unemployment near 4.1%, a result the president used to argue the U.S. can afford cheaper borrowing.
- Federal Reserve officials have not changed policy and say the September decision will depend on upcoming inflation data, while markets raised the odds of a rate increase after the jobs numbers.
- Economists and analysts say the plan mixes separate tools—trade policy handled by the executive and Congress, monetary policy set by the Fed—and that cutting trade could reduce foreign demand for U.S. Treasuries, which would push borrowing costs higher.
- The move marks a clear escalation of a long-running campaign by Trump to pressure the Fed, it puts his hand-picked chair Kevin Warsh under public strain, and it could prompt legal fights and economic fallout if carried out.