Trump Renews Fed Pressure With Trade Threat
SCMP · 2 SOURCESabout 3 hours ago2 MIN
Summary
US President Donald Trump on Friday escalated his campaign against the Federal Reserve, saying he could stop trade with countries with which the United States runs a deficit unless the central bank lowers interest rates. The threat came after August employment data beat expectations, strengthening the case for tighter monetary policy at the Fed’s meeting starting on September 15.
Key Points
- Trump wrote on social media that the Fed should “LOWER THE RATE” or he would stop trading with countries with which the United States has a deficit.
- He addressed Fed Chair Kevin Warsh and board members directly, urging them to “get smart” and “BE PATRIOTS,” reviving pressure on the central bank
- The US Labor Department said non-farm payrolls rose by 162,000 in August, above expectations, while unemployment stayed at 4.1 per cent.
- Investors increased bets on a rate hike at the Fed’s next policy meeting beginning September 15, pushing stocks and short-dated bonds lower
- Trump said the Supreme Court had recognised his authority after striking down his earlier tariff regime, though any trade embargo move would likely face legal challenges
Why It Matters
For Hong Kong readers, the immediate issue is whether renewed political pressure on the Fed adds volatility to US rates, the dollar and global markets that influence local financing costs and investor sentiment. Trump’s threat to use trade restrictions as leverage also raises the risk of fresh legal and policy uncertainty in international commerce.