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US President Donald Trump speaks at an event in Michigan on Monday. [Reuters]
US President Donald Trump speaks at an event in Michigan on Monday. [Reuters]

President Donald Trump renewed his pressure on the Federal Reserve to cut its benchmark interest rate.

Speaking to reporters aboard Air Force One on Monday as he traveled to Michigan, Trump said interest rates "have to come down," adding that US GDP growth of "8, 9, 10, even 12 percent" was achievable and "that's where it should be."

He argued that some countries maintain lower interest rates than the United States only because of money they have drawn from America. "There are countries that have lower rates than us, but they wouldn't even exist if it weren't for the United States," he said. "They take money from us and because of that they have lower rates than us. That shouldn't be."

Trump said the US should have the lowest interest rates in the world. "If we bring the money those countries are earning into our portfolio, we can do it," he said. "America should be the lowest-rate country in the world, like it was 30 years ago."

The remarks came one day before the Fed's July FOMC meeting, at which policymakers will decide on the benchmark interest rate. The two-day meeting begins Wednesday, with the rate decision to be announced Thursday.

The US benchmark interest rate currently stands at 3.50 to 3.75 percent annually. The Fed has held rates steady four consecutive times this year — in January, March, April and June. Rates were also left unchanged at last month's FOMC meeting, the first held under Fed Chair Kevin Warsh, whom Trump personally nominated.

Trump described Warsh as "fantastic" but added, "He has a board, and the board members are very political."

"He wants to do the right thing," Trump said. "I know what he wants to do, but maybe he has to get the approval of some people with bad intentions."

Trump appeared to suggest that Warsh wants to cut rates but is being blocked by other board members who are politically opposed to him.

On inflation, which has been a key obstacle to rate cuts, Trump said, "I inherited the worst inflation in history from Joe Biden, but prices are coming down rapidly. And you're going to see them come down very substantially as soon as the war" — referring to the conflict involving Iran — "is over."


mokiya@heraldcorp.com