Trump bemoans Fed interest rate policy, says U.S. should be paying much less — SkimNews
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- Trump told reporters Wednesday the Fed board is a "political board" whose Obama- and Biden-era appointees are keeping rates artificially high, while praising Chairman Kevin Warsh as doing a "great job" since starting in May after succeeding Jerome Powell
- The Fed has not raised its benchmark rate in more than three years and cut three times in late 2025 following three reductions the prior year — yet Trump argued the pace remains too slow given solid economic data
- Trump cited the nation's nearly $40 trillion debt as reason the U.S. "should be paying much less" and contrasted the 3.5% U.S. rate with Switzerland's roughly 0.5%, saying he has "the absolute right to cut off all business with a country like Switzerland"
- FOMC minutes from the July meeting showed "many" officials expect higher rates to be necessary unless inflation shows more progress, even as the annual rate remains well above the Fed's 2% target
- U.S. GDP grew at just a 1.5% annualized rate in Q2, below expectations and down from 2.1% in Q1, while Trump insisted he does not see a bond market problem despite calling rates unfairly high
- The Treasury Department announced Wednesday it is stepping up its bond buyback program specifically targeting debt with duration of at least 10 years, after a surge in longer-maturity yields
- Trump complained that 25 years ago, good economic news pushed rates down — but now, "the better they are, the worse it is for interest rates"
Why it matters: Trump has now escalated his long-running Fed pressure campaign into trade threats against a low-rate ally, while his administration simultaneously uses the Treasury's bond buyback program to quietly manage a yield curve the president publicly calls fine. With the national debt near $40 trillion, Q2 GDP undershooting at 1.5%, and six rate cuts over 18 months still not enough to satisfy him, the story is the widening gap between what the White House wants from monetary policy and what the FOMC is willing to deliver.
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