Donald Trump Pushes Federal Reserve To Cut Interest Rates

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U.S. president Donald Trump is pushing the Federal Reserve – America’s secretive central bank – to cut interest rates (i.e. the cost of borrowing money) as a means of offsetting the short-term impact of his tariff policies on the economy.

Here is how Trump framed the issue on his Truth Social platform…

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The Fed declined to cut rates when its open market committee (FOMC) met earlier this week, citing the ongoing expansion of economic activity.

“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the committee noted. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.”

To recap: higher rates limit borrowing, essentially pumping the brakes on economic activity. Conversely, low interest rates allow for cheaper borrowing – which in theory stimulates investment, jobs and economic growth. Rates are lowered when the economy needs a boost. They are raised when policymakers want economic growth to cool so they can get a handle on inflation.

As FITSNews previously reported, the ostensibly apolitical Fed cut rates to try and boost economic activity during the final months of former president Joe Biden’s administration – a move many believed was intended to give former vice president Kamala Harris an electoral advantage.

Trump is betting the markets will have his back as he seeks to bring jobs back to the United States – and achieve other geopolitical concessions – via tariffs. For those of you unhip to global markets, tariffs are taxes on imports – or levies assessed “by governments on the value of imported products,” per the International Trade Association (ITA).

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The committee did acknowledge “uncertainty around the economic outlook has increased,” and that it would “be prepared to adjust the stance of monetary policy as appropriate if risks emerge.”

While the sort of hyperinflation we have witnessed in recent years has crippled consumers, the Fed’s goal of maintaining a targeted annual inflation rate of 2% – while also achieving “maximum employment” – is a good thing.

Why is “target inflation” good? Well … incomes have to be created from somewhere, right?  And if the price of a particular item remains stagnant then the paycheck of the worker who produced that item is likely to remain stagnant as well.

Sadly, the politicization of interest rates is nothing new. During Trump’s first term in office, rates were raised seven times in less than two years. By contrast, the central bank raised rates just twice during the entire eight years Barack Obama was in office – and one of those rate hikes was approved in December of 2016, the month after Trump was elected.

Count on FITSNews to keep a close eye on the Fed’s policies and their impact on the economy as Trump pursues an aggressive new strategy to bring jobs and investment back to the United States…

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ABOUT THE AUTHOR…

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.

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