WASHINGTON: US President Donald Trump has urged the Federal Reserve to lower interest rates, arguing that the United States should have the lowest borrowing costs in the world as its economy expands.
Trump made the remarks aboard Air Force One while travelling to Michigan on Monday. The Federal Open Market Committee is scheduled to meet this week.
“Rates should be lowered. This country could be at eight percent, nine percent, 10 percent, 12 percent GDP. That's what it should be,” Trump told reporters.
The president said the United States faced higher interest rates than some countries that depended heavily on American economic and security support.
“We should have the lowest interest rate in the world,” Trump said. “We have other countries that are paying less interest rates, and if it wasn't for us, they wouldn't even exist.”
Asked whether he was concerned that the Fed could raise rates to counter inflation, Trump said the central bank’s leadership had to secure the support of its board.
“Well, I have a board. And Kevin's fantastic, but he's got a board and the board members are very political, I would say,” Trump said.
“He wants to do the right thing. I know what he wants to do, but you need the consent of some people that have perhaps bad intentions,” he added.
Trump pointed to a recent inflation report and argued that prices were declining. He again blamed former President Joe Biden for the rise in costs that preceded his return to the White House.
“Costs are going down rapidly. Don't forget, I inherited the, I haven't been here very long. I inherited the worst inflation in history from Biden, but costs are going down rapidly,” Trump said.
The president also linked the inflation outlook to the ongoing war involving Iran, saying prices could decline further when the conflict ended.
“And as soon as the war is over, you're going to have, you're going to see a big drop,” he said.
Trump cited Switzerland as an example of a country benefiting from lower borrowing costs despite what he described as a large trade imbalance with the United States.
“If you take a look at, like Switzerland, where we have a $30 billion deficit, I could wipe out that deficit overnight, overnight,” he said.
Trump has repeatedly argued that lower interest rates would stimulate investment, reduce borrowing costs and strengthen economic growth. Presidents traditionally avoid directing the Federal Reserve’s monetary policy decisions, although they may publicly comment on economic conditions.
