President Donald Trump says he will “demand that interest rates be lowered immediately”

The President Donald Trump He fired his first volley at the Federal Reserve, saying on Thursday that it will pressure it to lower interest rates.

Talking via video Addressing a gathering of world leaders at the World Economic Forum in Davos, Switzerland, the new president did not mention the Fed by name in a wide-ranging policy speech, but made it clear that he would seek lower rates.

“I will demand that interest rates be lowered immediately,” Trump said. “And they should also go down globally. Interest rates should follow us.”

The comments represented an early strike by Fed officials, with whom he had a very contentious relationship during his first term. He often criticized Chair Jerome PowellTrump named him, occasionally calling politicians “boneheads” and comparing Powell to a golfer who can’t putt.

Stocks reacted slightly positively to the comments, with the Dow Jones Industrial Average extending gains as Trump spoke and the 2-year Treasury yield slightly lower.

In this flurry of activity surrounding the President’s first week, he has not discussed his views on monetary policy. However, during the presidential campaign, Trump stated that he should play a role in interest rate decisions.

For his part, Powell and his colleagues have emphasized the importance of Fed independence. Powell, in particular, has often emphasized that the central bank does not make decisions based on political considerations. Trump has no statutory authority over the Fed, although he appoints members to the governing board.

Fed independence is seen as essential to stable markets, although the central bank has come under fire in recent years for dismissing the 2021 inflation hike as “transient,” which led to some aggressive hikes.

Trump’s comments come less than a week before the Fed holds a two-day policy meeting that ends Wednesday.

Markets see little chance of the Fed cutting its benchmark borrowing rate further, which is currently set in a range of 4.25% to 4.5% after a full percentage point of cuts in the last four months of 2024. The first rate cut is likely to come in June and there is about a 50-50 chance of another move before the end of the year, according to CME Group data.

The Fed cut the funds rate after raising it by 5.25 percentage points in an effort to combat inflation. Although inflation is still above the central bank’s 2% mandate, officials have said policy should not be so restrictive as they see the pace of price rises moderating.

Trump blamed the rise in inflation on the former president Joe Biden about “wasteful deficit spending.”

“As a result, this is the worst inflationary crisis in modern history, and for our citizens as well as for the entire world, the interest rates are terrible. Food prices and the price of almost everything known to man went through the roof,” he said.

A Fed official declined to comment on Trump’s remarks.