Former President Donald Trump has once again urged the Federal Reserve to lower interest rates, proclaiming that the country is not experiencing inflation.
“Oil prices are declining, interest rates are down (the sluggish Fed should reduce rates!), food prices are also dropping, there is NO INFLATION. The long-suffering USA is raking in billions of dollars weekly from tariffs imposed on nations that have taken advantage of us,” he posted on Truth Social on Monday.
Last week, Trump implemented tariffs on various countries, raising the levy on China to 54%, which sparked retaliatory measures. The response led to a collapse in the markets, with futures linked to the tech-heavy Nasdaq index reaching their lowest level since January 2024. The price of Bitcoin dipped below $75,000 early on Monday.
A cautious market climate, together with OPEC’s decision to increase oil production, has pushed the price of West Texas Intermediate (WTI) crude oil down by 16%, now at $60 a barrel within four trading days. Lower crude prices are typically associated with disinflation in the global economy.
Trump’s advocacy for Fed rate cuts aligns with market expectations for five rate reductions this year. Such potential easing from the Fed could provide markets with the necessary cushion to weather the impact of Trump’s aggressive tariff strategy, which is expected to continue for the foreseeable future.
In his earlier Truth Social post on Monday, Trump stated that China has benefitted far too much at the expense of the U.S. over the years.
“The largest offender, China, whose markets are crashing, just upped its tariffs by 34%, in addition to its already exorbitant tariffs. They have ignored my warning not to retaliate against abusing nations. They have profited enough for decades at the expense of the good old USA! Our previous ‘leaders’ are responsible for allowing this and many other issues to occur in our country. MAKE AMERICA GREAT AGAIN!,” he wrote.
Over the weekend, Trump emphasized that he would not reach a deal with China until the trade deficit is addressed.