President Donald Trump, speaking Thursday to the World Economic Forum, called for future interest rate cuts to follow declining oil prices, in remarks that align with the Federal Reserve’s projections for further easing. The speech marks Trump’s first significant commentary on monetary policy since taking office three days ago.
“With oil prices going down, I’ll demand that interest rates drop immediately, and likewise they should be dropping all over the world,” Trump, speaking via video from the U.S., told the audience of global leaders and business elites gathered in the Swiss alpine town. His comments suggest a conditional approach, linking monetary policy to energy markets.
A Rare Accord With the Fed
Trump’s remarks are notable for their congruence with the Federal Reserve’s current outlook. The central bank, under Chair Jerome Powell, has signaled plans to cut interest rates twice more this year, with additional reductions likely in 2026 and 2027. The Fed’s stance reflects expectations that inflation will continue to moderate even as the unemployment rate stays low and the economy grows faster than what the central bank sees as its long-term potential.
This alignment contrasts sharply with Trump’s first term, during which he frequently criticized the Fed for raising rates.
Linking Rates to Oil
Trump’s call to tie rate cuts to oil prices underscores his administration’s broader focus on economic growth and global competitiveness. Brent crude, the global oil benchmark, has been under pressure in recent weeks, with prices dipping below $70 per barrel.
While the Fed generally avoids direct ties between monetary policy and commodity markets, Trump’s comments suggest he views oil prices as a key driver of economic conditions. Lower oil prices, by reducing costs for businesses and consumers, could slow inflation even while accelerating economic growth. That would give the Fed room to ease policy further even in an expanding economy.
A Global Audience
Trump extended his rate-cut argument to central banks worldwide, urging coordinated action to stimulate growth. “They should be dropping all over the world,” he said, framing monetary policy as a global tool to counter economic headwinds.
The message resonated with Trump’s broader economic philosophy, which prioritizes growth and market strength. However, it remains to be seen whether other nations will follow the lead of Trump and the Fed.
The Fed’s Next Meeting
The Fed’s next policy meeting, scheduled for Jan. 28-29, is expected to leave rates unchanged as officials evaluate the impact of prior cuts. Some Fed policymakers have warned that progress on bringing down inflation may be in danger of stalling or may have already halted. Trump’s remarks suggest he will continue to monitor monetary policy closely, but for now, his position appears aligned with the Fed’s roadmap.
The post Trump Says He Will ‘Demand’ Rate Cuts, Aligning His Views With Federal Reserve appeared first on Breitbart.
