U.S. President Donald Trump on Thursday said he would demand that interest rates drop immediately, and that other countries should follow suit – marking his first broadside at Federal Reserve monetary policymaking since taking office just three days ago.
“With oil prices going down, I’ll demand that interest rates drop immediately, and likewise they should be dropping all over the world,” Trump told the World Economic Forum on Thursday in Davos, Switzerland.
Trump’s remarks come five days before the Fed’s first policy meeting to be held during his administration – on Jan. 28 and 29 – with very broad expectations of no change in rates to be agreed at the gathering.
A number of Fed officials, including Chair Jerome Powell, have already expressed a need for caution about lowering rates further from here because of sticky inflation. Several policymakers had made an effort to take potential Trump policies into account in new forecasts issued last month that reflected expectations for higher inflation and slightly stronger growth this year than reflected in previous projections.
The Fed has cut interest rates already by 100 basis points since September.
Trump was broadly critical of the Fed for raising rates during the first two years of his first term in office and lambasted Powell, whom Trump had elevated to lead the U.S. central bank, for leading that effort.
(Reporting By Dan Burns; Editing by Chizu Nomiyama)