Trump says U.S. GDP could reach 20% as Fed weighs rate hikes

  • President Trump claimed U.S. GDP could reach 14%, 15%, 16% or 20% annualized and urged the Fed to keep rates low.
  • Real GDP grew 1.5% annualized in Q2 2026 while PCE inflation rose 5.3% annualized and core PCE rose 3.6%.
  • Markets assigned 66.1% probability of a September rate hike; U.S. gasoline averaged $4.08 per gallon.

President Donald Trump claimed the U.S. economy could record annualized real GDP growth of 14%, 15%, 16% or even 20%, arguing that such expansion would not trigger inflation and urging the Federal Reserve to cut rather than raise interest rates. He made the remarks on Monday during an Oval Office event on prescription drug prices. "We could have a GDP of 14, 15, 16 and 20," Trump said. "Success in growth does not cause inflation." The comments came as the Personal Consumption Expenditures price index rose at a 5.3% annualized rate in the second quarter of 2026 while core PCE rose 3.6%, both above the Fed’s 2% target, and real GDP expanded 1.5% annualized, down from 2.1% in the prior quarter. Markets now price in a roughly 66% chance of a 25-basis-point rate increase at the September FOMC meeting. Trump also promoted a Venezuela oil arrangement to ease gasoline prices, where average U.S. pump prices reached $4.08 per gallon, nearly 30% above last year. Other developments reported alongside the remarks included Middle East tensions and regulatory actions against Amazon.

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