Trump Presses Fed Not to Raise Rates Ahead of September Meeting

According to CNBC, President Donald Trump and senior administration officials have urged the Federal Reserve not to raise interest rates at its September monetary policy meeting next week and instead lower its benchmark rate. The central bank has held rates steady all year while inflation remains well above its 2% target, but investors are pricing in a 60% chance of a quarter-point hike at the Sept. 15-16 meeting, according to CME Group's FedWatch tool. The meeting comes just weeks before the November midterm elections, and economists said a rate increase could add to borrowing costs for consumers and businesses. Mark Hamrick, an economic analyst and founder of The Hamrick Brief, said persistently high prices have hit middle- and lower-income households especially hard. Mark Higgins, senior vice president at Index Fund Advisors, said keeping policy restrictive until inflation is decisively tamed is the most reliable way to restore price stability and that a rate hike would send a clear message. Moody's chief economist Mark Zandi said a Fed cut would likely push already rising long-term rates higher, lift borrowing costs for businesses and commercial property owners, and could pressure stocks. He added that such a move would signal the Fed had lost independence from the president and could lead to even higher inflation later.