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Trump wants lower interest rates. Traders are betting on a hike
usatoday.com • • business
Key Points:
- President Donald Trump is urging the Federal Reserve to lower interest rates, despite most traders expecting a rate hike at the Fed's upcoming September meeting.
- Inflation has remained above the Fed's 2% target for five years, prompting officials to consider raising rates to control rising prices, even as the job market remains stable.
- Fed officials, including Governor Michael Barr, have cited external shocks such as tariffs, Middle East conflicts, and rapid AI expansion as reasons inflation progress has stalled.
- The Federal Open Market Committee has kept rates steady since July 2023, with the current target range at 3.5% to 3.75%, but several members have indicated potential support for an increase.
- Most traders now expect the Fed to raise rates to 3.75%-4% on September 16, pending the review of August inflation and employment data.
