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Donald Trump threatens to halt trade with deficit countries unless Federal Reserve lowers interest rates

President Donald Trump issued a public demand on Friday for the Federal Reserve to lower interest rates, threatening to stop trading with nations where the United States runs a trade deficit unless the central bank complies. This move marks a shift in the administration's approach, as the president has previously criticized the Federal Reserve's decisions and expressed a desire for the U.S. to have the lowest interest rates in the world. While the August jobs report showed a significant gain of 162,000 jobs, the administration argued that growth does not inherently cause inflation. The administration announced that tax cuts and investments in artificial intelligence will eventually boost productivity and growth. However, the president expressed frustration with high interest rates and the national debt, which has exceeded $40 trillion. The administration's pressure campaign includes support from Vice President JD Vance and Treasury Secretary Scott Bessent. Despite the president's demands, Federal Reserve Chair Kevin Warsh has maintained that the central bank's independence is preserved. Warsh has emphasized that the focus remains on inflation, noting that many components of the PCE price measure have risen significantly over the past year.

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