Trump threatens to cut trade with deficit countries if the Fed doesn't slash interest rates

Free daily briefing on global business news.

Trump has made repeated demands that the central bank slash interest rates, even as inflation remains elevated

Chip Somodevilla/Getty Images

President Donald Trump on Friday threatened to cut off trade with countries with which the United States runs a trade deficit unless the Federal Reserve reduces interest rates.

Trump posted the threat on Truth Social, responding to August payroll figures showing 162,000 jobs added — a result that topped forecasts. "LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT," Trump wrote, adding that high interest rates put the U.S. at "a very unfair disadvantage."

Trump addressed his remarks to Federal Reserve Chair Kevin Warsh and the Fed's monetary policy group, urging them to "get smart" and "be patriots." He argued that a stronger country warrants a lower interest rate and said the U.S. should have "the LOWEST RATE of any country in the World."

Trump also claimed legal authority for the trade cutoff threat, citing a Supreme Court ruling on tariffs. "Which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged 'the President' has an absolute right to do," he wrote. "IT'S BETTER THAN TARIFFS!"

The jobs report that prompted the post showed August payrolls exceeding forecasts by a wide margin. The figures pushed traders to ramp up expectations for a rate hike at the Fed's next meeting, according to Reuters.

Trump has made repeated demands that the central bank slash interest rates, even as inflation remains elevated. In his Friday post, he framed the trade surplus that other countries hold with the U.S. as leverage, writing that without American agreement to allow those surpluses, those nations "would no longer be considered financially ELITE."

Join 500,000+ readers who start their day with Quartz.

By subscribing, you agree to our Terms of Service and Privacy Policy.

Global business news for a smarter world