September 5, 2026 | 05:32 pm
TEMPO.CO, Jakarta - United States President Donald Trump threatened to stop trading with countries that could cause the U.S. to run a deficit unless the U.S. central bank, the Federal Reserve (the Fed), lowers interest rates.
"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," Trump said on Truth Social, as quoted by ANTARA. He also asked the Fed board to act "smart" and occasionally act like patriots.
In a subsequent post, Trump wrote that economic growth does not cause inflation. He argued that the notion that growth causes inflation has actually hampered U.S. economic progress for 25 years.
Trump said the U.S. should be achieving GDP growth of 15 to 20 percent, rather than the 2 to 4 percent growth rates seen in recent years. He added that the country should be in a much stronger financial position, saying he expects the U.S. to eventually pay off its debt and see improvements across other areas of the economy. Every one-point increase in interest rates actually costs the country US$650 billion per year, he said.
In late May, Trump said Fed Chair Kevin Warsh would lead a major modernization effort at the U.S. central bank, while remaining completely independent in making all decisions.
Meanwhile, Trump has frequently criticized former Fed chair Jerome Powell for being too slow to lower the benchmark interest rate.
Before becoming the current Fed chairman, Kevin Warsh served as a member of the Fed's Board of Governors from February 2006 to March 2011. At 35, he was the youngest member of the board when he was appointed. He also served as an economic policy adviser to the president and a member of the White House National Economic Council.
Trump nominated Warsh as the new Fed chairman in late January. Then, on May 13, the U.S. Senate approved his appointment as the new Fed chairman for the next four years.
Read: Will Gold Prices Reach Rp2.7 Million Next Week?
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