President Donald Trump orders the Fed to ‘lower the interest rates’ after his hand-picked Federal Reserve Chair Kevin Warsh openly defies him
President Donald Trump lashed out at the Federal Reserve on Wednesday, September 16, after the central bank raised interest rates for the first time in more than three years, demanding rates be slashed to 1 percent or lower.
Donald Trump demands lower interest rates
“Interest Rates in the United States should be 1 percent, or less, because we are the Best Credit in the World — BY FAR. Our Country is BOOMING with new Investment!” Trump wrote on Truth Social. “If we stopped trading with every country that we have a deficit with, which is most of them, we would make, at least, 1.5 trillion dollars a year. The word ‘deficit’ is nothing more than a fancy word for LOSS. We are ‘carrying’ almost every country in the world and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA AND FAST!”
During a press conference following the decision, Federal Reserve Chair Kevin Warsh, who was nominated by Trump earlier this year, declined to discuss any conversations he had with the president about rates.
First rate hike in years
The increase, which was widely expected, marks the Fed’s first rate hike in more than three years, fueled by climbing inflation amid the war in Iran.
“What is your message here to President Trump?” ABC News’ Elizabeth Schulze asked Warsh.
“I’ve got nothing for you on the discussion with the president,” Warsh replied, emphasizing that “the least well-off [Americans] have the most to gain from stable prices.”
“The decision we made today was the right decision to deliver on the remit that Congress gave us to ensure stable prices,” he claimed.
Trading with other countries
Trump already threatened earlier this month to stop trading with countries running trade surpluses with the United States if the Fed refused to lower rates.
“A STRONG COUNTRY MEANS A LOWER INTEREST RATE – IT’S A BETTER CREDIT… very simple! We should have the LOWEST RATE of any country in the world, like ‘the old days.’ Without the United States agreeing to allow them their big surpluses and we could stop that immediately, they would no longer be considered financially ELITE! LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” Trump wrote on September 4.
Trump also accused the Fed of putting the United States at an economic disadvantage through higher borrowing costs.
Those higher rates increase borrowing costs for Americans while also adding to the cost of servicing the national debt, which surpassed $40 trillion in August.