Trump's company could save millions if interest rates fall like he wants
- President Donald Trump would save millions in annual interest payments if the Fed interest rates fall.
- Trump has issued repeated public attacks on Federal Reserve Chairman Jerome Powell to cut the Fed's rate, which would benefit several loans Trump took out on multiple properties.
- The loans have variable interest rates, meaning the lower the interest rate, the more money he'll save.
- Trump has insisted that the American economy is booming, but the Fed is weighing cuts as financial communities brace for the first signs of a recession.
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President Donald Trump has issued repeated public attacks on Federal Reserve Chairman Jerome Powell to cut the Fed interest rate and would make millions annually if rates do fall.
The savings would come from the $360 million in four loans from Deutsche Bank that Trump borrowed in the five years before he became president for his hotels in Chicago and Washington, DC, and his Doral golf resort in Florida, the Washington Post reports.The loans have variable interest rates, meaning the lower rates are cut, the more money he'll save.
The Post notes that just a quarter-point reduction, which many investors now predict will occur in mid-September, could save Trump as much as $275,000 annually on just his Doral loan.
Bloomberg News reported that every quarter-point reduction could save Trump $850,000 annually, which would create more than $3 million in annual savings if the Fed dropped rates a full percentage point as Trump has demanded.
The Fed cut short-term rates by a quarter of a percentage point in July, the first such action in more than a decade.
The move toward a full percentage point cut stands in sharp contrast to Trump's insistent claims that the American economy is booming as financial communities are bracing for the first signs of a recession.
Fed officials are apparently divided over whether to further lower interest rates come September, and Powell said Friday at a Federal Reserve symposium that the Fed lowering rates further might not be enough to protect the American economy from Trump's trade policy.
This sparked almost immediate backlash from Trump, who has bucked presidential historical precedent by retaining his business interests despite repeated accusations of conflict of interest. Trump took to Twitter to insist "we have a very strong dollar and a very weak Fed," and attacked Powell as an "enemy" comparable to China.
Trump has a well-documented past of going to great lengths to protect and strengthen his business interests, including using money from his charity organization to pay off legal settlements for his businesses, suing Deutsche Bank to get out of paying back a mortgage, and declaring bankruptcy six times.