WASHINGTON — President Trump demanded Friday that the Federal Reserve lower interest rates after a surprisingly strong August jobs report — despite expectations that the central bank’s board will either maintain or raise rates due to persistently elevated inflation.
Trump threatened to sever trade relations with dozens of countries if the Fed didn’t heed his call, warning: “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged ‘the President’ has an absolute right to do.”
As of 2025, the US ran a trade deficit with nearly 100 nations — including China, Mexico, Vietnam, Germany, Japan, India, South Korea, Canada, Israel and most members of the European Union.
“IT’S BETTER THAN TARIFFS!” Trump went on. “The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!”
The president’s threat of trade actions is a new point of leverage with the Fed board, which is now led by his appointee Kevin Warsh.
The US economy added 162,000 jobs in August, more than double the 65,000 economists had expected. The unemployment rate remained steady at 4.1%
“Great jobs number just announced, breaking all estimates (except mine!) by double and triple – And you haven’t seen anything yet!” Trump began his Truth Social message ahead of the Labor Day holiday weekend.
“EMPLOYERS ADDED 162,000 JOB IN AUGUST. Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE – IT’S A BETTER CREDIT…Very simple!”
Trump added: “We should have the LOWEST RATE of any country in the World, like ‘the old days.’ Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE!”
Despite the strong labor market, the economy remains constrained by annual inflation of 3.4% as of July, well above the Fed’s annual target of 2%.
“The Fed’s predominant focus right now should be on prices,” Warsh told the Fed’s annual summer meeting in Jackson Hole, Wyo. last week.
“If the Fed gets inflation wrong and judges the economy wrong, who gets the worst of it?” he added. “Not the financial high-fliers. Hard-working Americans are the ones left to deal with inflation that is too high or jobs that suddenly appear less secure.”
