Donald Trump Urges The Fed to Lower Interest Rates to 1 Per Cent
US President Donald Trump has launched a sharp critique of the Federal Reserve System’s (The Fed) monetary policy. Through a post on his social media platform, Truth Social, on Wednesday (16/9), Trump urged the US central bank to immediately and significantly lower benchmark interest rates.
This pressure comes shortly after The Fed decided to raise interest rates by 0.25 percentage points (2_25 basis points). This increase is the first since 2023, bringing the federal funds rate to a target range of 3.75 per cent to 4 per cent.
Trump emphasised that the US position as the country with the best credit credibility in the world should ensure that interest rates remain far below current levels. He compared the US economic position, which he considers far superior to other nations.
“Interest rates in the United States should be 1 per cent or less, because we are the country with the best credit in the world; far better than others,” Trump wrote. He also added a firm command for monetary authorities to act quickly: “Lower US interest rates. Immediately!”
In addition to the issue of interest rates, Trump highlighted global trade conditions. He claimed that the US is currently experiencing an “explosion” of new investment. Trump argued that the US must stop bearing the economic burden of other countries that run trade deficits with America.
According to him, the term “deficit” is merely a euphemism for a loss. He projected that if the US ceased trading with such deficit-running nations, the US could potentially generate at least 1.5 trillion US dollars per year.
In his statement, Trump once again voiced his dissatisfaction with Jerome Powell, the former Chair of The Fed, who is deemed too slow in easing monetary policy. Instead, Trump has placed great hope in Kevin Warsh, whom he referred to as the new Fed Chair.
Trump previously stated that Warsh would lead a massive modernisation effort at the central bank while maintaining independence in decision-making. At the end of last August, Trump believed that Warsh would take the necessary steps to ensure the US has the lowest interest rates in the world to support domestic economic growth.