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Trump urges interest rate cut after strong jobs report raises hike bets
Confirmed
In Short: President Trump has called for interest rate cuts, citing the U.S.'s stronger creditworthiness and arguing that higher rates put the country at a disadvantage.
Following the robust August jobs report, President Trump has advocated for a reduction in interest rates, asserting that the U.S.'s improved credit status should translate into lower borrowing costs. He emphasized that the Federal Reserve, particularly with its new leadership, should act in the nation's best interest.
Economists like Nancy Vanden Houten of Oxford Economics maintain that while the strong employment figures do not necessitate a rate hike, they do lower the threshold for such a move if inflation does not show progress. Matthew Ryan from Ebury noted that futures markets now suggest a 60% chance of a rate increase at the September Fed meeting, up from previous expectations.
The president's call for lower rates was echoed by other analysts, such as Stephen Brown from Capital Economics, who stated that the August employment report provided no justification for maintaining current rates. Neil Birrell from Premier Miton Investment Office also noted that a rate hike is now more likely.
The shift in market expectations is reflected in CME Group's 'FedWatch' data, which shows nearly 60% of traders now betting on an interest rate hike in September, a significant change from earlier predictions.
What's confirmed
- Trump argued that the United States’ stronger creditworthiness should translate into lower interest rates and said the country should have the lowest rates in the world.
What's still developing
- Donald Trump has called for interest rates to be cut later this month, claiming higher rates put the US at a "very unfair disadvantage".
- "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 president said in a post on social media, external.
- "Even the most committed dove would struggle to find anything in the August employment report to justify keeping interest rates unchanged," said Stephen Brown, chief North America economist at Capital Economics.
- Trump calls on the Fed to lower interest rates after a strong job report On Friday, new data showed the US job market experienced significant expansion in August, surpassing expectations and offering Trump’s Republican Party a rise ahead of upcoming midterm elections.