Trump threatens trade cutoff unless Fed cuts rates after stronger August jobs report
Peter Schiff and Jim Cramer criticized the president's pressure on the Federal Reserve after payrolls exceeded forecasts and July employment was revised higher.
CNN and The New York Times independently describe the same conditional trade threat tied to Federal Reserve rate cuts. The Bureau of Labor Statistics directly verifies the key contextual fact that August payroll employment rose by 162,000. CNN also specifically supports the stated $1.2 trillion total trade-deficit figure, though it characterizes it as the prior year's total rather than a newly released August figure.
President Donald Trump threatened to halt trade with countries where the United States runs trade deficits unless the Federal Reserve lowers interest rates, renewing his demand for U.S. borrowing costs to be the world's lowest. The comments followed an August employment report showing 162,000 jobs added, nearly triple the 56,000 consensus estimate, while July was revised from a 23,000-job loss to a 21,000-job gain. Veteran investor Peter Schiff said a cutoff of trade with surplus countries would cause goods shortages, higher prices and unemployment, while Jim Cramer questioned how Federal Reserve Chair Kevin Warsh would respond to the president's demands. The stronger labor data increased market expectations for a September rate increase even as Trump called for cuts, with federal funds futures pricing a 58.4% chance of an increase, according to the existing account.
- Federal Reserve: The U.S. central bank, which sets interest-rate policy to pursue stable prices and maximum employment.
- Trade deficit: A gap that occurs when a country imports more goods and services than it exports.
- Federal funds futures: Contracts used by markets to gauge expectations for future U.S. central-bank interest-rate decisions.