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Demand to the Fed: Trump wants "substantial interest rate cut"


            
              Tuesday, October 08, 2019
              
                

            
US President Trump in campaign mode: An interest rate cut, but it must be substantial.
(Photo: picture alliance / dpa)

              In 2020, US President Trump wants to secure his second term. A booming economy helps. Therefore, Trump never tires of demanding interest rate cuts from the US Federal Reserve. In the tone he is now but sharper.
              US President Donald Trump has again urged the Federal Reserve (Fed) to cut interest rates significantly, pointing to low inflation. "We want to see a rate cut, a very substantial one," said Trump. "We have no inflation." Therefore, there is a "claim" to a rate cut. "I hope the Fed does that." Behind Trump's approach is likely to be worried that the world's largest economy in 2020 – the year of the targeted re-election – could run out of steam. The trade war with China and the weaker global economy prompted the industrialized nations organization OECD to lower its forecast for US growth from 2.3 to 2.0 percent in the coming year. Trump had set a goal of at least three percent. With cheaper money, investment and consumption could be boosted, at the same time the dollar would tend to be weakened and US goods abroad priced more attractive. The US Federal Reserve cut interest rates in June for the first time since the financial crisis of 2008 and then topped out in September. It now stands at 1.75 to 2.0 percent, while the European Central Bank runs a zero interest rate policy.

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