Trump issued the sweeping ultimatum in a Truth Social post reacting to a much-stronger-than-expected monthly jobs report by urging the central bank and its chairman, Kevin Warsh, to “get smart” and cut rates.
Read Trump’s full post:
The Fed declined to comment on Trump’s post.
Taken at face value, the threat to end trade with deficit-harboring countries is extreme: The U.S. has large trade deficits with dozens of countries, including its top trading partners. The White House did not immediately respond to CNBC’s request for additional information on the post.
The message nevertheless shows Trump resuming his pressure campaign against the Fed, which had eased since the appointment of Warsh, his handpicked successor to Jerome Powell.
The post comes two months before the midterm elections, where Americans’ unhappiness with persistent high inflation has been a dominant theme.
Trump has long sought lower interest rates and frequently complains about U.S. deficits with other countries.
A week earlier, however, Warsh suggested in a speech that rate hikes could soon be on the table. The Fed chair said he is committed to bringing the inflation rate back down to the central bank’s 2% target, “Short-term interest rates are the predominant tool to achieve the dual mandate.”
On Thursday, Vice President JD Vance called for lower rates, arguing it would be the “proper and responsible” response to recent U.S. inflation data.
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.”
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