President Donald Trump says he’ll ‘demand that interest rates drop immediately’

President Donald Trump He lobbied his first flight at the Federal Reserve, saying Thursday that he would apply pressure to lower interest rates.

Speaking to a gathering of world leaders at the World Economic Forum in Davos, Switzerland, the new president in a wide-ranging policy speech did not mention the Fed by name, but made clear that he will seek lower rates.

“I demanded that interest rates go down immediately,” Trump said. “And again, they are going to fall all over the world. Interest rates are going to follow us everywhere.”

The comments represented an initial strike at Fed officials, with whom he had a very contentious relationship during his first term. He often criticized Chair Jerome Powellthat Trump appointed, occasionally calling politicians “boneheads” and comparing Powell to a golfer who can’t putt.

Stocks reacted little to the statements, although the policy-sensitive 2-year Treasury yield was lower at 4.29%.

In the flurry of activity surrounding the president’s first week in office, he did not discuss his views on monetary policy. However, during the presidential campaign he indicated that he should have a say in interest rate decisions.

For his part, Powell and his colleagues emphasized the importance of Fed independence. Powell in particular has often insisted that the central bank does not make decisions based on political considerations. Trump has no statutory authority over the Fed, although he appoints members to the Board of Governors.

The independence of the Fed is seen as essential for stable markets, although the central bank has come under fire in recent years for rejecting the increase in inflation in 2021 as “transitory” , which led to a series of aggressive increases.

Trump’s comments come less than a week before the Fed holds a two-day policy meeting that ends Wednesday.

Markets assign almost no chance that the Fed will further lower its benchmark lending rate, which is currently targeted at a range between 4.25%-4.5% after a full percentage point of cuts in the last four months of 2024. first cut probably arrived in June and about a 50-50 chance of another move before the end of the year, according to CME Group data.

The Fed cut its funds rate after a high of 5.25 percentage points in its efforts to fight inflation. Although inflation is still above the mandate of 2% of the Fed, officials said that the policy does not need to be restrictive as they see the pace of moderate price increases.

Trump blamed the rise in inflation under former President Joe Biden on “unconscionable deficit spending.”

“The result is the worst inflationary crisis in modern history, and very high interest rates for our citizens and even for the entire world. Food prices and the price of almost everything else known to humanity is going through the roof,” he said.

A Fed official declined comment on Trump’s remarks.