Trump urges interest rate cuts as Fed stays wary of inflation
USA Today • • business
Key Points:
- President Donald Trump reiterated his call for the Federal Reserve to lower interest rates, claiming they are “artificially high,” while the U.S. national debt surpassed $40 trillion.
- Trump praised Fed Chair Kevin Warsh but suggested other committee members might have political motives in their rate decisions, a criticism he previously directed at former Chair Jerome Powell.
- The Federal Open Market Committee has not raised rates since July 2023, maintaining the federal funds rate at 3.5% to 3.75%, with some members dissenting in favor of a hike at the last meeting.
- July FOMC minutes indicated uncertainty about inflation outlooks, with risks skewed to the upside due to factors like Middle East conflicts and AI-driven demand, and participants expecting stable labor market conditions.
- Despite a slight uptick in consumer prices in July, inflation fell to 3.4% annually but remains above the Fed’s 2% target; most traders anticipate the Fed will keep rates steady at the September meeting.
