Trump Demands Fed ‘Get Smart’ and Lower Interest Rates After Jobs Report Crushes Expectations
President Donald Trump renewed his demand for lower interest rates Friday after the latest jobs report showed the U.S. economy added 162,000 jobs in August, nearly tripling economists’ expectations.
The stronger-than-expected report provided Trump with fresh ammunition to tout the strength of the economy while simultaneously increasing his pressure on the Federal Reserve to bring borrowing costs down.
“Great jobs number just announced, breaking all estimates (except mine!) by double and triple — And you haven’t seen anything yet!” Trump declared.
Economists had expected employers to add roughly 53,000 to 55,000 jobs during August. Instead, payrolls jumped by 162,000 while the unemployment rate remained unchanged at 4.1%.
Trump argued that the improving economic picture should translate into significantly lower interest rates because the United States has become a stronger borrower.
The president maintained that a financially stronger country represents a better credit risk and therefore should be rewarded with cheaper borrowing costs.
Trump went even further, arguing that the United States should have the lowest interest rates of any country in the world.
His demand puts additional pressure on the Federal Reserve and its new chairman, Kevin Warsh, ahead of the central bank’s September policy meeting.
Warsh recently signaled that another interest rate increase could remain possible as the Fed attempts to control persistent inflation.
The strong August employment report could reinforce that argument. A resilient labor market gives policymakers more room to keep rates elevated — or potentially raise them — while focusing on bringing inflation back toward the Fed’s 2% target.
Trump sees the situation very differently, arguing that elevated interest rates are putting American businesses and consumers at an unnecessary disadvantage.
“The Fed Board, with its great new leader, must get smart — BE PATRIOTS for a change,” Trump said.
The president also issued an extraordinary trade warning, threatening to stop doing business with countries that maintain large trade surpluses with the United States if the Fed refuses to lower rates.
Trump argued that many foreign economies enjoy favorable financial conditions because they benefit enormously from access to the American market.
He suggested the United States could use that leverage as an alternative to tariffs, pointing to presidential authority over trade while criticizing a recent Supreme Court tariff decision.
Trump has repeatedly argued that lower interest rates would reduce borrowing costs for homebuyers, businesses and the federal government while providing another boost to economic growth.
The latest jobs numbers give the White House a major economic victory heading into the final stretch before the midterm elections. But they could also complicate Trump’s push for cheaper borrowing if Federal Reserve officials conclude that the economy is strong enough to withstand higher rates.
Trump is making clear that he has no intention of backing down. With employment growth smashing expectations, the president says America’s economic strength should be rewarded with lower rates — and he is demanding that the Fed “get smart” and deliver them.