During his presidency Donald Trump demanded that the Federal Reserve reduce interest rates by three percentage points to decrease national debt expenses.
The Federal Reserve Rate stands at least three points above its proper level according to Trump who shared his thoughts on Truth Social on Wednesday. The annual refinancing expenses increase by $360 billion for each percentage point the interest rate rises. “No Inflation, COMPANIES POURING INTO AMERICA. LOWER THE RATE!!!”
The Federal Reserve faces continuous criticism from Trump because he believes their high interest rates slow down economic growth and increase the costs of servicing U.S. national debt. The benchmark rate currently stands at 4.25%-4.50%.
The Federal Reserve faces a decision regarding inflationary impacts from Trump’s trade policies which include extensive copper and other goods tariffs. The implementation of these duties creates price increases while economic growth indicators show signs of slowing down.
The central bank faces growing political pressure because Trump’s recent statements challenge its traditional independence from White House control. The Federal Reserve has consistently rejected previous requests to lower interest rates because they need to fulfill their dual responsibility of fighting inflation and achieving maximum employment.
