'We could turn that off in 2 minutes': Trump says US makes other countries rich

DUBLIN, IRELAND: President Donald Trump said Sunday, September 13, that the United States should pay the world’s lowest interest rate, arguing America’s strong credit benefits other countries and could be withdrawn.

Trump said the US makes other countries rich through its credit advantage and warned, “We could turn that off in two minutes.”

The comments came days before the Federal Reserve’s next policy meeting, during Trump’s two-day visit to Ireland and while he attended the Irish Open golf tournament.

Trump ties low rates to US credit

Asked whether he expected a rate hike, Trump said he did not know what the Fed would do, but argued that the United States should have the lowest borrowing costs.

“We should be paying the lowest interest rate in the world, regardless of their formulas,” Trump said, adding, “I know more about formulas than anybody.”

He then tied that argument directly to America’s credit position, saying the country has “the best credit in the world” and uses it to make other nations richer.

“We could turn that off in two minutes,” Trump said.

The comments came after US consumer prices rose more than expected in August, according to Bloomberg.

That data increased expectations among traders that the Fed could raise rates, with an 86% chance of a September move and two increases priced in by the end of the year.

Fed faces inflation pressure

The Federal Reserve’s policy meeting is scheduled less than a week after the latest inflation reading, which showed the largest increase in four months in a key measure of underlying inflation.

Trump has repeatedly criticized the Fed’s interest-rate policy, including attacking former Fed Chief Jerome Powell for not lowering borrowing costs more aggressively. 

Fed Chair Kevin Warsh has not faced the same pressure since taking over the central bank’s top post, though Trump has continued to signal frustration with the Fed’s stance.

Trump has also suggested Warsh’s options may be limited by what the president called a “very political” board of governors, as per the outlet.

Earlier in September, Trump floated cutting off trade with certain economies that have US trade deficits if the central bank did not lower borrowing costs. 

The report said it was unclear how that threat would help ease rates.

Tariffs add another inflation issue

The Fed is also confronting higher energy prices and the effects of Trump’s tariff policies on its inflation target, according to the report.

A rate hike could add to voter concerns about affordability, as per recent Reuters/Ipsos polls. Republicans hold slim majorities in both chambers of Congress, which are at stake in the midterm elections. 

Trump has argued that the Fed’s interest-rate levels have benefited other countries at the expense of the United States. 

On Sunday, he returned to that argument by focusing on the country’s credit strength rather than offering a specific rate forecast.