Fed, Trump and interest rates
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While Trump frames the issue as consumer pain, Wharton’s Joao Gomes told Fortune that cheaper borrowing would also ease interest payments on the government’s $37 trillion debt burden—likely a central motivation.
The president's latest attack comes as Powell is scheduled to deliver remarks at the Fed's annual conference in Jackson Hole, WY, on Friday.
As U.S. debt swells and the White House leans on the Federal Reserve to cut interest rates, investors are weighing the risk of "fiscal dominance," a scenario where keeping government financing cheap eclipses the fight against inflation.
Futures markets are also expecting a rate cut. Investors peg the chances of a quarter-point interest rate cut at nearly 96%, according to the CME FedWatch Tool, a measure of market sentiment.
10don MSN
Trump threatens to sue ‘loser’ Jerome Powell — as SF Fed chief says interest rates finally may fall
Trump said that his next line of attack against “loser” Jerome Powell for refusing to lower interest rates could be a lawsuit over his $2.5 billion HQ renovation.
Federal Reserve Chairman Jerome Powell on Friday did not give a clear indication of the central bank's plans to possibly cut interest rates amid pressure from President Donald Trump.