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Source: Newsmaker.id
US President Donald Trump has once again pressured the Federal Reserve to sharply cut interest rates, even though the latest US labor data shows job creation far exceeding expectations.
In a post on Truth Social, Trump welcomed the addition of 162,000 jobs in August. This figure was well above market forecasts and indicates that the US labor market remains quite robust.
However, despite this strong data, Trump continues to call for the Fed to adopt looser monetary policy. He argues that the strength of the US economy and its financial credibility should result in the country having some of the lowest borrowing costs in the world.
Trump also linked interest rates directly to trade policy, threatening to curtail trade with countries that run a surplus against the US if the Fed fails to lower rates.
According to Trump, this approach could serve as an alternative to tariffs. He also urged the Fed—which he noted is now led by a strong new leader—to immediately lower borrowing costs.
This latest pressure intensifies political scrutiny of the US central bank. Investors must now reassess the trajectory of interest rates amidst a mix of strong labor data, inflation risks, and political calls for more accommodative monetary policy.
Newsmaker Analysis: Trump's statements create a complex dynamic for the market. On one hand, strong Non-Farm Payroll (NFP) data typically supports the US dollar and Treasury yields, as it increases the likelihood of the Fed maintaining a hawkish stance. On the other hand, political pressure from Trump to cut rates poses a potential threat to the Fed's independence. If the market focuses primarily on labor data, the dollar could remain strong while gold faces downward pressure. However, if the narrative of rate cuts begins to dominate, yields could soften, paving the way for a rebound in gold and risk assets. (asd)
Source: Newsmaker.id