The Trump administration is mounting an unusually wide public push to stop the Federal Reserve from raising interest rates at its upcoming September meeting.
President Donald Trump, Vice President JD Vance, Treasury Secretary Scott Bessent, and senior economic counselor Peter Navarro have all urged the Fed to avoid a rate hike or cut rates outright.
Markets have priced in roughly a 60% chance of a quarter-point rate hike at the September 15-16 meeting, a probability nudged higher by a strong jobs report released Friday.
Trump escalated the pressure Friday by threatening to halt trade with countries that run trade surpluses with the U.S. unless the Fed cuts interest rates, a threat he had never previously made.
Navarro followed with an interview warning that a rate hike would be “careless” and “would hit precisely the sectors America needs to prosper most,” calling FOMC members “clowns.”
Navarro also said Fed Chairman Kevin Warsh is trying to “do the right thing,” suggesting the administration views Warsh as sympathetic to its position despite the public friction.
Vice President Vance said directly, “We believe that the Fed should be lowering interest rates,” adding, “it would be nice to have some help from the Federal Reserve.”
Treasury Secretary Bessent noted in a CNBC interview that the Fed typically does not raise rates during a supply shock until second- or third-order inflationary effects emerge.
Warsh has maintained that presidential pressure has had no impact on his decisions, citing the Fed’s decision to hold rates steady in July as evidence of the central bank’s independence.
In his Jackson Hole speech, Warsh pointed out that 54% of the 199 components in the PCE price measure had risen more than 3% over the previous 12 months, signaling persistent inflation.
Three Fed officials — Beth Hammack, Neel Kashkari, and Lorie Logan — dissented at the July meeting in favor of a quarter-point hike, underscoring internal pressure to act against inflation.
Administration officials have highlighted the recent three-month annualized core CPI rate running at 1.6%, though the Fed’s preferred core PCE measure sits at just over 3%.
Friday’s jobs report showed employers added 162,000 jobs in August, with average hourly earnings rising 0.3% for the month and 3.1% year over year, while unemployment held at 4.1%.
The midterm elections in November loom as important political context, with polls showing widespread voter dissatisfaction over higher prices and elevated borrowing costs.
A parallel to Trump’s first term exists: in May 2019, Pence, Mnuchin, and Kudlow all publicly called for rate cuts, and the Fed ultimately reduced rates two months later without immediately responding to that pressure.
Markets are now watching Friday’s CPI report closely, with Fed officials describing it as a critical gauge that could determine whether the central bank raises rates or holds them steady.
