Trump calls on Fed to slash interest rates by 100 bps
President Donald Trump has called on the Federal Reserve to dramatically cut interest rates by a full percentage point on Friday, extending a year long campaign to browbeat the US central bank to slash borrowing costs.
Although the Fed cut rates last month for the first time since 2008, Mr Trump said policymakers need to lower rates further, adding that manufacturers are being hurt by the strong dollar.
“We are being handcuffed by the Federal Reserve,” Mr Trump told reporters outside the White House on Friday.
The comments come just days after White House trade adviser Peter Navarro said the Fed should cut rates by another percentage point this year to bring US rates in line with the rest of the world
“The Federal Reserve, before the end of the year, has to lower interest rates by at least another 75 basis points or 100 basis points to bring interest rates here in America in line with the rest of the world,” Mr Navarro told Fox News on Tuesday. “We have just too big a spread between our rates and that costs us jobs.”
Mr Trump has been relentless in his criticism of the Fed, having repeatedly called on the central bank to cut interest rates and said chairman Jay Powell was doing a “bad job.” He first called on the Fed to lower rates by a point in April. But the renewed focus on the dollar this week comes after China allowed its currency to weaken through a key threshold in response to Washington’s plans to hit $300bn of Chinese goods with a 10 per cent tariff starting next month.
In response, the Trump administration officially labelled China a “currency manipulator” — a move analysts said is largely symbolic but would serve as a political justification for more tariffs.