Trump demands 1% rates hours after the Fed raised them
Trump posted on Wednesday that US rates should be 1% or less and that the country has the strongest credit anywhere. He also wrote that cutting off trade with every nation the US runs a deficit with would earn at least $1.5 trillion a year.
On Wednesday, former President Donald Trump demanded interest rates of 1% or less, despite the Federal Reserve setting its rate at 3.75%-4.00%. Trump suggested that cutting off trade with every nation the US runs a deficit with could generate at least $1.5 trillion annually. This deficit represents money flowing out of the country, leading foreign entities to lend back to the US Treasury.
The removal of these buyers would impact the borrowing costs Trump aims to lower. The Dollar Index had not surpassed 100.00 during the trading session prior to Trump's post, but it quickly rose above 100.00 within half an hour, maintaining a high near 100.50. The Stochastic Relative Strength Index showed an overbought condition before the post, then turned bullish and has remained elevated since.
Trump's call for reduced trade deficits highlighted the impact of higher interest rates on the economy and currency, as they attract global investment while increasing the cost of holding non-yielding assets like gold.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 3 other outlets
- Fed raises rates as Trump faces higher borrowing costs qatar-tribune.com
- US Fed chair Kevin Warsh explains why the Federal Reserve raised interest rates economictimes.indiatimes.com
- Now that the Fed raised rates, where to score the best yields on your cash cnbc.com
