Image: © Gage Skidmore via Flickr

Trump is “not thrilled” about interest rate rise

But the Fed probably isn't thrilled he said it out loud

America's version of the Bank of England, called the Federal Reserve (or 'the Fed') has put up interest rates – and Trump's made his feelings known.

What it means: It's very unusual for a leading political figure to comment on what central banks do, but Trump said it's what he would have done before, so he'll say it now too.

If the Fed raise rates, they want people to save more: if they lower them, they want them to spend. But if politicians react to their announcements, supporters may change their behaviour in line with what the leader they support has said – and the whole system starts to get a bit shaky. If they start to expect politicians to comment on their decisions, that might affect what decision they make, when all they should be worrying about is keeping things stable.

Trump didn't make very clear why he was annoyed. He said he felt his government was putting so much work into the economy and now rates were going up... which we can only assume means that he doesn't think it's right to try and slow down people's spending when things are going well.

The Fed's logic will have been that if business is booming, it's important to encourage people to save through increased interest rates, so that inflation doesn't happen.

Recent articles

Reader Comments