President Donald Trump renewed his pressure campaign on the Federal Reserve on Friday, demanding the central bank slash interest rates or face the prospect of the U.S. cutting off trade with countries where the U.S. runs trade deficits.
In a Truth Social post reacting to a stronger-than-expected monthly jobs report, Trump urged the Fed and its new chairman, Kevin Warsh, to “get smart” and lower rates, according to a copy of the post reviewed by CNBC.
“Great jobs number just announced, breaking all estimates (except mine!) by double and triple – And you haven’t seen anything yet! EMPLOYERS ADDED 162,000 JOB IN AUGUST,” Trump wrote, before issuing his ultimatum: “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT.”
The Fed declined to comment on the president’s post, CNBC reported. The White House did not immediately respond to a request for additional information.
Taken literally, the threat to end trade with deficit countries would be a dramatic escalation. The U.S. runs trade deficits with dozens of nations, including many of its largest trading partners. Economists note that eliminating those deficits overnight would be disruptive to global supply chains and U.S. consumers, though the president framed the idea as “BETTER THAN TARIFFS!”
Trump also cited a recent Supreme Court ruling on tariffs, which he said acknowledged the president has “an absolute right” to take such action, calling the decision “ridiculous and very costly.”
The post lands two months before the midterm elections, with persistent inflation a dominant theme for voters. Trump has long advocated for lower interest rates and frequently complains about U.S. trade deficits.
But his latest remarks mark a sharp contrast with signals from Warsh, whom Trump handpicked to succeed Jerome Powell. Just a week earlier, Warsh suggested in a speech that rate hikes could soon be on the table, reiterating his commitment to bringing inflation back down to the Fed’s 2% target. “Short-term interest rates are the predominant tool to achieve the dual mandate,” he said.
Trump’s post also drew a contrast with comments from Vice President JD Vance, who on Thursday called for lower rates, arguing it would be the “proper and responsible” response to recent inflation data.
Some administration officials struck a more cautious tone. National Economic Council Director Kevin Hassett, asked about interest rates on CNBC on Friday morning, said, “the Fed will do what it wants to do. We respect their independence, but I think the argument for holding steady would be pretty strong.”
The clash highlights the ongoing tension between the White House and the central bank over the path of monetary policy, even with a Trump-appointed chair now at the helm. Investors will be watching for any formal response from the Fed or further clarification from the administration.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/04/trump-fed-rates-jobs-trade.html
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