President Donald Trump demanded a sharp reduction in U.S. interest rates Wednesday after the Federal Reserve increased its benchmark target by 25 basis points, while directing no personal criticism at Fed Chair Kevin Warsh.
By yourNEWS Media Newsroom
President Donald Trump called for U.S. interest rates to fall to 1% or lower Wednesday after the Federal Reserve moved in the opposite direction, raising its benchmark rate by a quarter percentage point following an extended period without an increase.
The Federal Open Market Committee raised the federal funds target range to 3.75% to 4%, a 25-basis-point increase. The decision was approved unanimously by the committee.
Trump, who has repeatedly pressed the central bank to reduce borrowing costs, responded by arguing that the strength of the United States and its creditworthiness justify substantially lower rates.
“Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR. Our Country is BOOMING with new Investment!” Trump wrote on Truth Social. “If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year.”
Trump continued by linking his demand for lower rates to the nation’s trade deficits.
“The word ‘Deficit’ is nothing more than a fancy word for LOSS. We are ‘carrying’ almost every country in the World, and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!” he added.
The president’s reaction continued his longstanding pressure on the Federal Reserve to pursue lower interest rates, but his Wednesday statement notably did not single out Fed Chair Kevin Warsh for criticism.
Warsh, whom Trump appointed earlier this year, now leads the central bank as it moves toward tighter monetary policy despite the president’s public demands for substantially lower borrowing costs. Federal Reserve records identify Warsh as the current chairman.
Trump’s approach toward Warsh differs from his treatment of former Federal Reserve Chair Jerome Powell. Trump repeatedly criticized Powell during his tenure and referred to him as “too late,” faulting him for not lowering interest rates as quickly as Trump wanted.
Wednesday’s increase marked a reversal from the direction Trump has urged the central bank to take. Rather than moving rates toward the 1% level sought by the president, policymakers increased the target range to 3.75% to 4%.
The Federal Reserve said the increase was intended to support its dual mandate and a more timely return of inflation to its 2% objective.
Trump, however, maintained that the country’s economic position warrants considerably lower rates, focusing his response on U.S. credit strength, investment and international trade while leaving Warsh personally out of his criticism.
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