President Donald Trump is set to concentrate on global trade relationships and the Federal Reserve’s upcoming decision on the nation’s interest rate during a pivotal week in Washington. After his trip to Scotland, Trump returned to Washington and is expected to address critical issues including trade agreements and potential rate cuts, which have significant implications for the U.S. economy.
On Sunday, Trump announced a significant trade deal with the European Union’s Commission President Ursula von der Leyen during his visit to Turnberry, Scotland. The agreement involves a 15% tariff on goods from the 27-country bloc, down from the previous 30% rate. In return, the EU agreed to purchase $150 billion worth of U.S. energy and make $600 billion in other investments. However, Trump acknowledged the challenges in securing the deal, citing unresolved issues over the European car market and U.S. agricultural goods, and rated the chance of a deal at 50/50.
Trump has been vocal in his demands for the Federal Reserve to cut interest rates to 1%, a move he argues would stimulate the economy. This effort has put him in direct contention with Federal Reserve Chairman Jerome Powell, who has been hesitant to cut rates, citing the need to assess the economic impact of the ongoing trade deals. Powell’s cautious approach has kept interest rates within a range of 4.25% to 4.5%.
Before his trip, Trump had called on Powell to act, citing a strong job market and cooling inflation as reasons to lower rates. The central bank’s decisions, along with the trade agreements, are expected to shape the economic landscape, with both parties navigating the complex interplay of economic policies and their potential ramifications.