Trump urges Fed to cut rates to 1% or less

US President Donald Trump has renewed his call for sharply lower interest rates, saying the Federal Reserve should cut its benchmark rate to 1% or less, hours after the central bank raised borrowing costs for the first time in more than three years. “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR, ” Trump said in a post on September 16. “LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST! ” he added. Trump also said the US economy was “BOOMING with new Investment” and argued that the country could generate at least $1. 5 trillion a year by ending trade with countries with which it runs deficits. His comments came after the Fed raised its benchmark federal funds rate by 0. 25 percentage point to 3. 75%-4%, the first increase since July 2023. The move puts the central bank at odds with Trump’s demand for much cheaper borrowing. The Fed said inflation remained elevated and that the increase was aimed at bringing inflation back towards its 2% target. Fed projects rates well above Trump’s target The Fed’s latest projections put the median federal funds rate at 4. 1% at the end of 2026, followed by 4. 1% in 2027 and 3. 9% in 2028 — far above Trump’s proposed 1%. Policymakers also raised their inflation forecast, projecting personal consumption expenditures inflation at 3. 7% in 2026 before easing to 2. 3% in 2027 and 2. 1% in 2028. The central bank expects US economic growth of 2. 3% in 2026 and unemployment of around 4. 1%, suggesting policymakers see the economy as capable of withstanding relatively tight monetary conditions while inflation remains above target. Trump has repeatedly pressed the Fed to lower interest rates, arguing that high borrowing costs put the United States at a competitive disadvantage.

Read full story on Aaj English Tv