President Donald Trump threatened on September 4, 2026, to prevent the United States from trading with several nations unless the Federal Reserve lowers interest rates. In a post on Truth Social, Trump stated, "LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged ‘the President’ has an absolute right to do. IT’S BETTER THAN TARIFFS! The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change."
A trade deficit occurs when a country imports more than it exports. In 2025, the United States had its largest trade deficit with China, exceeding $200 billion, followed by Mexico and Vietnam. Overall, the U.S. recorded a $1.2 trillion trade deficit with all trading partners last year, according to federal trade data.
Trump's comments followed a jobs report indicating that U.S. employers added 162,000 new jobs in August, exceeding economists' expectations. This strong report may influence the Federal Reserve's decision on interest rates, as officials are scheduled to meet later in September. Following the jobs report, the odds of a rate hike at the upcoming meeting increased to 60% from 49% the previous day, according to CME FedWatch.
Federal Reserve officials have provided mixed signals regarding interest rates. Fed Chairman Kevin Warsh indicated he is open to raising rates if inflation remains high, while Fed Governor Michael Barr expressed readiness to vote for a rate hike if inflation data does not show progress toward the bank's 2% target. Conversely, Fed Governor Chris Waller suggested he would prefer to wait longer to assess economic conditions before supporting a hike.
The Consumer Price Index report for August is anticipated to be significant in determining the Fed's next steps. The annual inflation rate rose to 3.4% in July, influenced by increased gas prices due to disruptions in the Strait of Hormuz. If Trump follows through on his trade threat, it could further elevate prices, complicating supply chains for U.S. businesses that rely on imports from affected countries.
This is not the first instance this week where Trump has called for lower interest rates, labeling discussions of rate increases as "ridiculous" and attributing inflation to other factors. Trump's ongoing pressure campaign on the Federal Reserve has included attempts to influence its leadership and decisions, including a failed attempt to remove Fed Governor Lisa Cook over unproven allegations.
This story has been updated. CNN’s Molly English and Bryan Mena contributed to this report.