President Donald Trump has made no secret of his desire to exert control over the Federal Reserve’s economic policy. His primary demand? Cut interest rates.
That, Trump seems to reason, will give the economy a short-term jolt, even if it causes longer-term pain.
So, after the central bank did the opposite and raised rates slightly in early September following prolonged heightened price inflation, the president freaked out.
“LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” Trump wrote on Truth Social. He then voiced his displeasure with the new, higher rates multiple times during an interview with TIME Magazine on Sept. 28, accusing the board of “Trump derangement syndrome,” but also seemed to come to terms with his inability to sway the 12-person voting body — something he has been attempting to do for nearly a decade, starting during his first term
“I don’t blame Kevin,” Trump said, according to the TIME transcript. “I actually said, ‘What are you going to do?’”
With a cratering approval rating, and even waning support from Republican voters, Trump could use any help he could get on pitching an improving economic situation before November’s midterms.
Despite his agitating, he’s not likely, experts told TPM, to get that from the Fed, which is set to vote on interest rates again on October 28.
“I would be shocked if they cut rates at the moment because, the thing is, [inflation is] still way above two percent,” Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, a progressive research and policy think tank, told TPM. “There’s no universe where it would make sense to cut rates at this moment.”
The Fed works to maintain as high of a national employment rate as possible while tamping down inflation, a balancing act it can primarily only accomplish with its rate-setting lever.
All 12 voting members of the Federal Reserve Open Committee decided unanimously last month that the first rate hike since 2023 was in order. Sticky inflation was one reason. Consumers know and data shows that prices have been elevated above the Fed’s target of a 2% price increase annually for several years. At the same time, after historically low unemployment and a series of high-leverage years for workers, long-term unemployment is creeping upward and job hopping is down, meaning unemployed people are having a harder time finding work and working people are holding on to the jobs they have at the expense of higher wages. In 2025, employers added just over 15,000 jobs a month on average, a paltry showing compared to the more than 121,000 jobs added per month the year before.
After last week’s September jobs report from the Bureau of Labor statistics showed continued depression in the labor market, the odds that Fed governors would raise rates again in October dropped from about 51% at the end of September to 19% as of Monday, according to CME FedWatch, a data source used by the Atlanta Fed.
But even if the central bank maintains its current rate stance in October, experts told TPM another hike is likely imminent.
“I think there is an expectation that they will [raise rates] again,” Elise Gould, senior economist at the Economic Policy Institute, told TPM. “It’s not necessary that it will happen at the next meeting, it could happen after that. I don’t think that this jobs report was so weak that they’re going to change course in the coming months.”
Historically high treasury bond yields, or the return on bondholders’ investments, also likely triggered Warsh and other members of the Fed Board of Governors to take action, Ajilore said. Trump has proven able to sway financial markets through flippant social posts about what to invest in and when. But bond yields are one way markets are keeping a check on Trump’s runaway federal deficit, and any risk of compromised Fed independence.
“If there’s any sort of hint that the Fed, the Fed chair has been influenced by the White House, you’ll see that reflected in the market,” Ajilore said. Bond yields are high in part “because there is a worry that there might be some undue influence.”
So far, said Gould, there isn’t evidence the Fed isn’t succumbing to White House pressure tactics.
“I think that independence is holding,” she said.
The moral of the story is that whatever DonOLD wants, do the opposite.
I’m no economist, but I really don’t believe that dropping the interest rates, especially if perceived due to political influence, would have the effect that the dipshit thinks it would. The bond market would likely freak out, for one.
Posting again for the bazillionth time:
“Desperate people do desperate things.”
The Republicans stepped on their dicks big time with this putz in the White House. GOP is in one big jam. I cannot say I predicted the severity of this jam, but I did tell my wife early on to expect the GOP to overplay their hand – both Houses + Executive. Didn’t take a genius, but those of my generation especially will know what I’m talkin’ about. They tried it with Reagan. You’re dealt a full house, bet the farm and hit up against 4 of a kind. Hee Hee.
Stepping on one’s own dick requires a big dick. That would be called “facts not in evidence.” Just sayin’…