BlockBeats, September 5 — In the run-up to the Federal Reserve's September 15-16 meeting, the Trump administration is escalating public pressure on the central bank to avoid rate hikes and even consider further cuts. President Trump, Vice President Vance, Treasury Secretary Bessent, and White House senior economic adviser Navarro have all publicly called for maintaining or lowering interest rates.
Market Sees 60% Chance of a Hike
Markets currently assign a roughly 60% probability of a 25-basis-point rate hike in September, driven by August's nonfarm payrolls gain of 162,000 and an unemployment rate holding at 4.1%. Fed Chair Warsh continues to emphasize inflation risks, pointing out that 54% of components in the PCE price index have risen more than 3% over the past 12 months, arguing the Fed should keep its focus on controlling inflation.
Trump Threatens Trade Retaliation
Trump further stated that if the Fed does not cut rates, the U.S. could take measures such as halting trade with countries that run trade surpluses with the U.S. With the November midterm elections approaching, high prices and high interest rates are adding to political pressure on the Trump administration.
All Eyes on This Week's CPI Data
Markets will now focus on the upcoming U.S. CPI data, which could be the deciding factor for whether the Fed delivers a rate hike or holds steady in September.