Trump Demands 1% Interest Rates and Floats Cutting Off Trade With Deficit Nations
Trump says U.S. rates should fall to 1% or less and claims halting trade with deficit countries would generate at least $1.5 trillion a year.
WASHINGTON D.C. — Donald J. Trump called for U.S. interest rates to fall to 1% or lower and claimed the country could earn at least $1.5 trillion a year by cutting off trade with nations where it runs a deficit.
The president tied the demand to what he described as a booming economy and cast the trade deficit as a straight loss, pressing the Federal Reserve to act. Trump pitched halting trade with deficit partners as an alternative revenue source, a threat he has raised before.
“We are “carrying” almost every country in the World, and that cannot go on any longer,” Trump wrote.
The post lands as the Federal Reserve holds its benchmark rate at a level between 3.5% and 3.75%, according to abcnews. Starting in September, the Fed cut interest rates at three consecutive meetings, aiming to boost the labor market, according to abcnews. Futures markets expected two quarter-point cuts, with the first forecast in April and a second in the fall, according to abcnews.
Here is the full post on truthsocial: “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR. Our Country is BOOMING with new Investment! If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year. The word “Deficit” is nothing more than a fancy word for LOSS. We are “carrying” almost every country in the World, and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST! Trump” on September 16, 2026 at 4:38 PM ET.
This is Trump’s 3rd message released today, and the last post was 6 minutes ago, and it is not part of a thread. On average, Trump produces 18 posts per day since his inauguration on January 20, 2025. The move fits a broader pattern in Trump’s recent messaging, with 39 of his 578 posts over the last 30 days classified as Economy posts.
President Donald J. Trump posed at WASHINGTON D.C.
Daniel Torok / The White House
© copyright Flickr with permission
Most economists cast doubt on the proposal for far lower rates, saying a large cut risks overheating the economy and driving up already-elevated inflation, according to abcnews. At least one economist disagreed, saying much-reduced rates could boost a flagging labor market and prevent a possible slowdown, according to abcnews. Economists shared a belief in the need for an independent Federal Reserve Board insulated from the White House, according to abcnews.
The trade threat carries its own risks. Trump has already responded to a spike in the trade deficit by threatening embargoes on unfavored countries, posting a directive that read “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” according to finance.yahoo. The U.S. trade deficit in goods and services ballooned in July to $88.6 billion, the highest level since March 2025, according to finance.yahoo. That marked a 24.4% surge from June’s $71.2 billion, with continued deficits with major partners including Mexico, Vietnam, China and the European Union, according to finance.yahoo.
The drivers of that gap complicate the president’s argument. The most persistent driver of America’s large trade deficit is foreign investment in the United States, not other countries’ trade barriers, according to piie. As of December 2024, nearly 50 years of trade deficits had resulted in U.S. net international liabilities reported at about 90 percent of GDP, according to piie. If foreign investors demand higher interest rates on U.S. loans, the country will face higher costs in servicing its foreign debt, negating benefits from a lower trade deficit, according to piie.
Trump has pressed the Fed on rates for years. He once called on the Federal Reserve to cut rates by at least a full percentage point “over a fairly short period of time,” saying such an action would make the U.S. economy even better and “greatly and quickly” enhance the global economy, according to pbs. In that earlier episode, the Fed cut its key policy rate by a quarter-point to a range of 2% to 2.25%, citing uncertainties threatening the expansion, according to pbs.
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