President Donald Trump says he will ‘demand that interest rates fall immediately’

president Donald Trump fired its first volley at the Federal Reserve, saying on Thursday it would press for lower interest rates.

Talking via video before a gathering of global leaders at the World Economic Forum in Davos, Switzerland, the new president, in a wide-ranging policy speech, did not mention the Fed by name but made it clear he would want lower interest rates.

“I’m going to ask for interest rates to come down immediately,” Trump said. “And likewise they must fall all over the world. Interest rates should follow us everywhere.”

The comments were an initial blow to Fed officials with whom he had a very contentious relationship during his first term in office. He often criticized the chairman Jerome Powellwhom Trump appointed, at times calling politicians “morons” and comparing Powell to a golfer who can’t hit.

Stocks reacted slightly positively to the comments, with the Dow Jones Industrial Average extending gains as Trump spoke and the yield on the policy-sensitive 2-year bond inching slightly lower.

In the flurry of activity surrounding the first week in office, he has not discussed his views on monetary policy. During the presidential campaign, however, Trump indicated that he should have a say in interest rate decisions.

For their part, Powell and his colleagues emphasized the importance of the Fed’s independence. In particular, Powell has often insisted that the central bank does not make decisions based on political considerations. Trump has no legal authority over the Fed, although he nominates members of the governing board.

The Fed’s independence is seen as essential to stable markets, although the central bank has come under fire in recent years for ruling out a 2021 inflation spike. as “transitional,” which led to a series of aggressive promotions.

Trump’s comments come less than a week before the Fed holds a two-day policy meeting that ends on Wednesday.

Markets see little chance of the Fed cutting its benchmark lending rate further, which is currently targeting a range of 4.25%-4.5% after full percentage point cuts in the last four months of 2024. Traders are pricing in the first rate cut likely to come in June and about a 50-50 chance of another move before the end of the year, according to CME Group data.

The Federal Reserve cut its interest rate after raising it by 5.25 percentage points in an effort to fight inflation. Although inflation is still above the central bank’s 2 percent mandate, officials said policy should not be so restrictive as they see the pace of price increases slowing.

Trump blamed the spike in inflation on the former president Joe Biden for “wasteful deficit spending.”

“The result is the worst inflationary crisis in modern history and extremely high interest rates for our citizens and indeed for the entire world.” Food prices and the prices of almost every other thing known to mankind have gone through the roof,” he said.

A Fed official declined to comment on Trump’s remarks.