The American president Donald Trump has strongly criticized the central bank on Friday. He wants the interest rate to be lowered by one percentage point.
Trump reiterated his position that Federal Reserve (Fed) Chairman Jerome Powell has been too slow. “Europe has had 10 interest rate cuts, we have none. Despite that, our country is doing great. Go for a full point,” the president wrote on Truth Social.
Central banks usually limit interest rate changes to a quarter of a percentage point. Trump said the Fed can always raise interest rates again if cuts lead to inflation.
A lower interest rate makes it cheaper for American consumers and businesses to borrow. That should stimulate the economy.
Trump has repeatedly criticized Powell for not lowering interest rates as he wants. The two men met in person for the first time last week, with the president telling Powell he made a “mistake” by not lowering interest rates.
It is not common for a president of a country to openly interfere with monetary policy. That is a matter for the Fed in this case.