Trump will likely be let down on his demand for a 'Big Interest Rate Drop' this week

AP Photo/Pablo Martinez Monsivais

• Businesses and investors will breathe a sigh of relief this week if the Federal Reserve takes steps to insulate the economy from growing risks.
• But those efforts will likely do little to placate President Donald Trump.
• The White House began to call for large interest-rate cuts over the past several months, ranging from a half a percentage point to nearly four times that amount.
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Businesses and investors will breathe a sigh of relief this week if the Federal Reserve takes steps to insulate the economy from growing risks, as is widely expected. But those efforts will likely do little to placate President Donald Trump.

Policymakers are poised to lower interest rates Wednesday for the second time since the financial crisis, bringing the target range a quarter percentage point lower to between 1.75% and 2%. While that would be low by historical standards, Trump has called for far more aggressive measures to juice growth ahead of his 2020 reelection bid.

"...The United States, because of the Federal Reserve, is paying a MUCH higher Interest Rate than other competing countries," Trump wrote on Twitter early Monday. "They can't believe how lucky they are that Jay Powell & the Fed don't have a clue. And now, on top of it all, the Oil hit. Big Interest Rate Drop, Stimulus!"

The White House began to call for large interest-rate cuts over the past several months, ranging from a half a percentage point to nearly four times that amount. Trump suggested last week that borrowing costs should be at or even below zero, levels that would typically only be seen during a severe downturn.

Read more: Dem candidates stumble on how to counter Trump on the trade war with China

In the weeks since a key recession warning flashed, Trump has often in the same breath floated plans to stimulate the economy and downplayed concerns about growth.

He has also sought to shift any blame away from his escalating trade dispute with China, which has increasingly weighed on business outlooks and rattled financial markets in the US. Recent polls suggest tariffs have begun to undermine support for Trump on the economy, his strongest campaign issue.

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