The Federal Reserve should lower interest rates this month even though the US and China have agreed to a trade deal, President Donald Trump said Friday.
Trump has long argued that the Fed should be cutting rates more, even arguing that last month’s cut – the second in a row – wasn’t enough. On Friday, the president argued that even though the US and China have agreed to the first part of a trade deal, the rate cuts should continue, CNBC reported.
“The Federal Reserve should cut rates regardless of how good this is,” Trump said. “We have a great economy, but we have a Federal Reserve that’s not in step with the rest of the world.”
The Fed has cut rates twice this year – the first rate cuts in more than a decade – in response to a weakening global economy. That weakness has been caused, in large part, but the ongoing trade war between the US and China.
That war may be ending, however. Trump announced that the countries have agreed on the first phase of a deal that will bring Chinese agricultural purchases to $40 billion-$50 billion and includes agreements on intellectual properties, CNBC reported. In exchange, the US has agreed to hold off on tariff increases for the time being.
The Federal Reserve’s governing board, the Federal Open Market Committee, will make a decision on interest rates at its next meeting, scheduled for Oct. 29-30. Market watchers widely expect another rate cut. With CME Group’s FedWatch tool placing the odds at about 74%, according to CNBC.