Fed Raises Rates for the First Time in Three Years; Trump Directly Pressures It to Cut Them to 1% or Below

【Financial News, New York—Reporter Lee Byung-chul】 Donald Trump, president of the United States, demanded that the Federal Reserve System (the Fed), the United States’ central bank, sharply cut interest rates to 1% or below just hours after raising its policy rate for the first time in more than three years. The conflict has once again come to the fore between the Fed, which raised rates to curb inflation, and President Trump, who is calling for rate cuts in the name of economic growth and investment.
On the 16th local time, President Donald Trump said on Truth Social, "We are supporting almost every country in the world, and this situation cannot continue any longer," adding, "Cut interest rates for the United States. And do it quickly."
President Donald Trump specifically argued that the United States’ policy rate "should be 1% or lower." He emphasized as the reason, "We are by far the most creditworthy country in the world."
President Donald Trump’s demand came immediately after the Fed raised its policy rate by 0.25 percentage points that day. Led by Chair Kevin Warsh, the Fed raised the policy rate from 3.50–3.75% to 3.75–4.00% at its regular Federal Open Market Committee (FOMC) meeting. It was the first rate hike since July 2023. The decision was unanimous among FOMC members.
President Donald Trump also cited investment flowing into the United States as grounds for sharply lowering interest rates. He claimed, "Our country is booming with new investment." He also linked the rate issue to the trade deficit, saying, "If we stopped trading with every country with which we have a trade deficit—and that would be most countries—we would earn at least $1.5 trillion a year."
Less than two weeks earlier, President Donald Trump had threatened to halt trade with countries that run trade surpluses with the United States if the Fed did not cut rates. Many of the United States’ major trading partners would be included.



[email protected] Reporter Lee Byung-chul Reporter