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Trump Urges Interest Rate Cut Amid Job Growth Reports
Confirmed
In Short: US President Donald Trump has called for interest rates to be cut, citing concerns that higher rates put the US at a disadvantage, despite strong job growth reports that have increased expectations for a rate hike.
Donald Trump has urged the Federal Reserve to cut interest rates, arguing that higher rates place the US at a significant disadvantage in global markets. In a social media post, Trump stated, '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!
However, recent job growth figures have raised expectations for a rate hike. The US economy added 162,000 new jobs in August, surpassing expectations, and the unemployment rate remained steady at 4.1%. Wage inflation also slowed to 3.1% from 3.2%. These figures have led to a 60% chance of a rate hike in September, according to CME Group's 'FedWatch' data.
The next interest rate decision is scheduled for September 15-16, with concerns over inflation persisting due to the ongoing conflict with Iran, which has driven up global oil prices. Despite the strong job numbers, US stock market indexes were trading down on Friday, reflecting investor sentiment that the market may react negatively to any rate increase.
What's confirmed
What's still developing
- Trump said the US should have the "LOWEST RATE of any country in the World".
- Last week, Kevin Warsh, chairman of the US central bank, signalled that rates could be hiked if policymakers were not confident price rises were easing for Americans.
- "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.
- "A hike in rates just became a bit more likely," said Neil Birrell, chief investment office of investment firm Premier Miton.
- Instead of the economy being deemed to have shed 23,000 jobs in July, some 44,000 were found to have been created in subsequent estimates.
- "We just got GREAT Numbers on Jobs, the Market should go UP, because our Credit and Economy are better but, as always, for the past 25 years, the Stock Market goes DOWN, because we're living under False Reality that if things are good, you've got to "KILL IT" because of a "fear" of Inflation," he said.
- The president's remarks came as stronger-than-expected jobs figures in the US added to growing expectations that rates could be increased, with inflation still running high and American households feeling the pinch of rising prices.
- The popularly known US Nonfarm Payrolls (NFP) report showed that the economy added 162K new jobs in August, surpassing consensus estimates for a reading of 56K by a wide margin.