Trump disagrees with a September Federal Reserve rate cut – wants rates higher for longer

Trump is ahead on the polling to win the presidential election in November, and he has bad news for borrowers.

He spoke in an interview with Bloomberg, expressing that he does not want a Fed rate cut in September, as the market is now pricing.

• Trump says he has no plans to fire Federal Reserve Chair Powell

Trump wants to hold rates high until after the election, no cut until after the election (which is three and half months away);

• says Fed should abstain from cutting rates and giving the economy a boost

Trump says the Fed shouldn’t cut and give Biden a boost.

Added – wants 15% corporate tax.

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Taking a look at the CME ‘FedWatch’ tool shows markets pricing in around a 90% chance of a cut at the mid-September FOMC meeting. A September cut will be off the table though if Trump gets his way. Something for traders to be aware of.

As an aside, I suspected this would happen … but I thought it was me being a bit of a tin hat. Apparently not!

• why cut in September when they could cut on November 7 and provide a gift to the new guy

This article was written by Eamonn Sheridan at www.forexlive.com.