US President Donald Trump has called for the United States to have the lowest interest rates in the world, days before the Federal Reserve is due to hold its next monetary policy meeting.
Speaking to reporters at the Irish Open golf tournament on Sunday, Trump said he was unsure whether Fed policymakers would raise interest rates at their meeting this week. He nevertheless insisted that the US should maintain the world’s lowest borrowing costs regardless of what economic data showed about inflation and overall economic conditions.
The latest comments come after the Labor Department’s Consumer Price Index, a key measure of inflation, recorded its biggest increase in four months on Friday.
The data has strengthened expectations that the US central bank could raise its federal funds rate target, which currently stands at 3.5% to 3.75%, when the Federal Open Market Committee concludes its meeting on Wednesday.
Inflationary pressures remain elevated as the US economy contends with Trump’s higher import taxes and rising energy costs linked to the war involving Iran. Officials at the Fed have expressed concerns that keeping inflation above its target for an extended period could make it more difficult and costly to bring price growth back under control.
The Fed’s governors are also meeting only weeks before the US midterm elections, which will determine whether Republicans retain their narrow majorities in both chambers of Congress.
A possible rate hike could further increase concerns about the cost of living among voters, according to recent Reuters/Ipsos polling.
Trump’s approval ratings have weakened as inflation has remained persistent. The president has repeatedly argued that US interest rates have benefited other countries while putting the American economy at a disadvantage.
“I know more about formulas than anybody, and with the best credit in the world, we make other countries rich,” Trump said on Sunday.
Trump has frequently criticised former Federal Reserve Chair Jay Powell, although he has shown greater support for the central bank’s leadership since his own choice for chair, Kevin Warsh, assumed the position earlier this year.
However, the president has recently become more explicit about his expectations for interest rates.
“LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” Trump posted on social media two weeks ago.
Speaking to reporters again later on Sunday before boarding a flight back to the United States, Trump repeated the warning and said: “We don’t want to have deficits with nations. We want to have surpluses or at least break-evens.”
National Economic Council Director Kevin Hassett said Trump would continue to defend the independence of Fed Chair Kevin Warsh regardless of the central bank’s decision on interest rates.
However, Hassett also acknowledged that Trump would not be pleased if the Fed decided to raise rates.
“I’m sure he’s not going to be super happy about it,” Hassett said on “Fox News Sunday.”
