Posted on 09/04/2026 7:25:48 AM PDT by Miami Rebel
President Donald Trump on Friday demanded that the Federal Reserve slash interest rates or else he will cut off trade with countries with which the U.S. maintains trade deficits.
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:
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. Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE - IT’S A BETTER CREDIT…Very simple! We should have the LOWEST RATE of any country in the World, like “the old days.” Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE! LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged “the President” has an absolute right to do. IT’S BETTER THAN TARIFFS! The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen! President DONALD J. TRUMP
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…..and we paid the price for that distortion with higher inflation…please let me know how much you are willing to lend….lol
Are you writing a textbook?
No one is re-establishing the gold standard.
President Trump is trying to strong-arm the Fed into weakening the dollar, a move which flies in the face of using a metal-based currency.
I invest overseas, just like President Trump.
During Joe Biden’s presidency, inflation rose significantly, starting at 1.4% in January 2021 and peaking at about 9.1% in June 2022, before declining to around 3% by mid-2023. Over the four years, consumer prices rose by 21.5%.
Since January 2012, the Federal Open Market Committee has stated that it seeks to achieve inflation at 2% over the longer run, using the PCE price index as the primary gauge.
In July 2026, the U.S. headline PCE inflation rate was 3.7% year‑over‑year, slightly above forecasts, while core PCE inflation held at 3.3%
Labor productivity growth can only be an offset to inflation.
Productivity increased last quarter at 1.4%.
The CPI numbers already reflect price improvements attributable to that improved productivity. And it ran at 3.4% for the twelve months ending July.
…and lowering interest rates will do that?…..rolling eyes here
The Fed needs to be stripped of its power to control interest rates. The only thing they need to be concerned with is our money system.
The August jobs report shows an addition of 16,000 jobs, a continuation of the moderate but steady improvement since Dec. 2025. I suspect Trump wants to accelerate this, and is finding investors in manufacturing (potential borrowers) need a lower rate to take the risk in an uncertain environment.
It must be that Trump is confident Iran will fold soon, and energy prices will drop like a rock, driving inflation down. However, Trump seems unwilling to do what would be needed to collapse Iran quickly.
In a high inflation (much higher than the gov’t numbers, I still believe - my auto and home insurance has just gone insane!) low unemployment scenario, voters will almost always vote based on the negative.
The basic requirement for financialization and globalism is fiat currency because it allows unlimited trade deficits, unlimited capital flight, etc.
Trump wants to weaken the dollar by lowering interest rates to make imports more expensive and exports cheaper. I am merely pointing out that a gold-backed currency restricts trade deficits/surpluses and forces capital to be allocated more in its home currency base, while at the same time restricting spendthrift government policies.
As far as not going back to gold, we'll see what happens when the US (or China or the EU) bankrupts itself.
“I’m a stubborn old guy...”
“This is probably why no president has appointed me to any position.”
Well, I know I’d rather have a mule than a hen plow a field. They get the job done. What some call stubborn is often just being focused on the task and making sure it is done on the straight and narrow.
the fed only controls one rate ... Trump should know this ...
I keep thinking he can’t top himself. The thing is lowering interest rates is not good for investment income. Also I thought rates were fairly decent right now. The other question is will lowering interest rates mean more people being able to purchase homes? Or will it instead lead to more new homeowners who really can’t afford any cost beyond the PITI resulting in multiple foreclosures in a few years?
And can anyone tell me is there a correlation between lower interest rates and people increasing their credit card debt?
Mortgage rates are tied to the 10 year treasury — which is a fairly pure (gadgets aside) market function based on demand. The Fed doesn’t control this.
The “prime rate” is really limited to institutional lending. This means it *does* impact credit card rates, savings interest rates (in the opposite direction). I suppose HELOCs, too.
But not mortgages.
Well, China is roughly 2-1/2x in front of us as a % of GDP. (State owned enterprises included.) The EU is in the best shape of the 3: As of 2026, the EU has a government debt-to-GDP ratio of ~ 83%, while the United States stands significantly higher at roughly 124%.
Thanks. I did not realize that.
Come on Rebel. You’re not a “stable genius”, what do you know? /s
t do we have now?
My bad!
No sweat - FWIW?
The tie to the 10 year isn’t a hard and fast rule, but it’s actually a pretty straight-forward and inherently logical thing.
I.e., The overwhelming majority of mortgages are 30 year (something like 90%) BUT, the average “life” of a mortgage? Lots of factors - but it has historically run in the 5 to 8 year range. Currently, I think it’s around 7 years. Meaning - most people either sell (or refinance) around 7 years into a 30 year.
Hence, mortgage lenders aren’t looking to do any favors - they lend predicated on expectations for other uses for the money.
As a consequence? Welp - what (relatively) secure other asset could I put the money in? The 10 yr treasury is simply the best benchmark to use as the alternative “I - the lender - need to make more than this”
Inflation (defined as debasement of the currency) is hard to measure, but I think you're right on this.
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