Trump to Fed: Cut rates or end trade with surplus nations — SkimNews
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- Trump issued a Friday Truth Social ultimatum demanding the Fed slash interest rates or he will cut off trade with countries the U.S. runs trade deficits with, adding that ending trade is 'better than tariffs.'
- The post reacted to an August jobs report of 162,000 new jobs that beat expectations, which Trump said proved the U.S. deserves the 'LOWEST RATE' of any country.
- Fed Chair Kevin Warsh, Trump's handpicked successor to Jerome Powell, suggested just a week earlier that rate hikes could soon be on the table to hit the central bank's 2% inflation target.
- Taken literally, the threat is sweeping: the U.S. has large trade deficits with dozens of countries, including its top trading partners, and the White House did not clarify the scope.
- VP JD Vance on Thursday called for lower rates as 'proper and responsible,' while NEC Director Kevin Hassett said the Fed 'will do what it wants' and stressed White House respect for its independence.
- The Fed declined to comment on the post; pressure had eased after Warsh's appointment but is now resuming ahead of midterms, where persistent high inflation has been a dominant voter issue.
Why it matters: Trump's ultimatum revives pressure on a Fed chair he personally installed, with Warsh having just signaled rate hikes could come. The literal threat — halting trade with dozens of deficit-running nations, including top partners — is economically unprecedented, but it lands two months before midterms when inflation frustration dominates, making the post as much about voter messaging as about monetary policy.
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