Federal Reserve Caving to Trump’s Pressure?

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President Trump has been pressuring the Federal Reserve to cut interest rates and it appears that they are going to do just that.

According to The Hill:

The Federal Reserve is likely to cut interest rates this week, a move that comes amid growing pressure from President Trump and new uncertainties about the global economy.


The Fed is expected to announce Wednesday that it will cut its baseline interest rate for the second consecutive meeting. After cutting rates in July for the first time since 2008 during the recession, the Fed is almost certain to nudge down borrowing costs to counter rising fears of a global recession and slowing U.S. job growth.

But while lower interest rates may relieve some pressure on the U.S. economy, a moderate cut will likely do little to appease Trump as he scrambles to regain leverage in his trade war with China.

Trump has long complained about the Fed’s refusal to tilt trade talks with China in his favor by boosting the economy and cheapening the dollar with lower interest rates. Federal Reserve Chairman Jerome Powell and other Fed officials have disavowed any pressure to stray from their legal charter to remain politcally neutral and fight Trump’s trade battles.

Many reports have indicated that the biggest challenge for the Fed has not been Trump’s challenge to its independence but his ongoing trade dispute with China.

This has created an ever-changing environment that they must be receptive to.

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