'America has the world's best credit; trade deficits are losses'

One Trump post can shake global markets. If keeping up with the daily flood of Trump news feels overwhelming, this column cuts through the noise — delivering the essential stories affecting global asset markets in under a minute, whether you're commuting, eating alone, or winding down for the night.

US President Donald Trump waves as he boards Air Force One at Joint Base Andrews in Maryland on Wednesday (local time). [AP]
US President Donald Trump waves as he boards Air Force One at Joint Base Andrews in Maryland on Wednesday (local time). [AP]

US President Donald Trump publicly pressed the Federal Reserve to cut interest rates Wednesday (local time), just hours after the central bank raised its benchmark interest rate, saying US rates should be "1% or lower."

Trump made the remarks on his Truth Social platform, writing that "America is by far the most creditworthy nation in the world."

"Our country is booming with new investment," he said, adding that if the United States stopped trading with every country with which it runs a trade deficit — "which is most of them" — it would earn "at least $1.5 trillion per year."

He then said the word "deficit" is "just a fancy word for loss," and argued that the United States is "feeding almost the entire world" and that "this cannot continue."

Trump appeared to be arguing that because the United States absorbs massive trade deficits with other countries, US interest rates should also come down.

He closed the post with a direct demand: "Lower the rate in the USA. Quickly!"

The Fed raised its benchmark interest rate to a range of 3.75 to 4.00 percent Wednesday, a quarter-percentage-point increase — its first monetary tightening move in three years and two months, since July 2023.

The hike drew particular attention as it was the first rate increase under Fed Chair Kevin Warsh, whom Trump appointed to lead the central bank.

Trump has repeatedly urged the Fed to cut rates ahead of the November midterm elections and has openly expressed hope that Warsh would lower borrowing costs.

The Fed, however, judged that inflation remains too high and voted unanimously to raise rates. All 12 voting members of the Federal Open Market Committee — comprising Fed governors and regional Federal Reserve Bank presidents — backed the decision.


mokiya@heraldcorp.com