Ahead of next week’s Federal Reserve meeting, relations between President Donald Trump and Fed Chair Jerome Powell have hit a low.
“Families are being hurt because Interest Rates are too high,” Trump wrote in a Truth Social post on Wednesday.
Trump has said he wants the Fed to sharply lower interest rates by as much as 3 percentage points to spur economic growth. (Although the central bank typically adjusts its benchmark in 25-basis-point increments, rates were slashed to near zero as recently as the Covid pandemic. “The Fed only resorts to such extreme measures in response to severe economic distress,” said Greg McBride, chief financial analyst at Bankrate.)
The president has argued that maintaining a federal funds rate that is too high makes it harder for businesses and consumers to borrow and puts the U.S. at an economic disadvantage to countries with lower rates.
The Fed’s benchmark sets what banks charge each other for overnight lending, but also has a trickle-down effect on almost all of the borrowing and savings rates Americans see every day.
