Trump Threatens Trade Halt With Deficit Nations as 162,000 Jobs Boost Rate-Hike Odds to 60%
Updated
Updated · The New York Times · Sep 4
Trump Threatens Trade Halt With Deficit Nations as 162,000 Jobs Boost Rate-Hike Odds to 60%
3 articles · Updated · The New York Times · Sep 4
Summary
Trump said he could stop U.S. trade with countries running bilateral deficits unless the Federal Reserve cuts rates, escalating his pressure campaign just before the Fed’s Sept. 15 meeting.
162,000 August jobs—more than double economists’ expectations—pushed market odds of a rate hike to 60% from 49%, strengthening the case for tighter policy instead of a cut.
Fed officials have already signaled openness to raising rates, with Chair Kevin Warsh and Governor Michael Barr citing inflation risks, while Governor Chris Waller said he could still back a hike if prices stay elevated.
3.4% July inflation, up a full percentage point since the Iran war disrupted Strait of Hormuz shipping, has kept focus on next Friday’s CPI report and on energy-driven price pressures.
A broad trade cutoff could worsen those pressures: the U.S. ran a $1.2 trillion overall trade deficit last year, and replacing suppliers from major deficit partners such as China, Mexico and Vietnam could prove difficult.