Speaking at the World Economic Forum on Thursday, President Donald Trump called for future interest rate cuts in response to falling oil prices, echoing the Fed's outlook for further easing. The speech will be Trump's first major comments on monetary policy since taking office three days ago.
“With oil prices falling, I demand that interest rates be lowered immediately. Interest rates should be lowered around the world as well,” President Trump told world leaders gathered in a video address from the United States. and business elites. A town in the Swiss Alps. His comments suggest a conditional approach that links monetary policy to energy markets.
A rare agreement with the Fed
President Trump's comments are notable for being consistent with the Fed's current outlook. The central bank, under Chairman Jerome Powell, has signaled plans to cut rates twice more this year, with further cuts likely in 2026 and 2027. The Fed's stance reflects expectations that unemployment will remain low and inflation will continue to moderate. The economy grows faster than central banks consider its long-term potential.
This alignment is in sharp contrast to President Trump's first term, when he frequently criticized the Fed for raising interest rates.
Relationship between interest rates and oil
President Trump's call to tie interest rate cuts to oil prices underscores his administration's broader focus on economic growth and global competitiveness. Brent crude, the global oil benchmark, has been under pressure in recent weeks, with prices below $70 a barrel.
Although the Fed generally avoids direct ties between monetary policy and commodity markets, Trump's comments suggest he considers oil prices to be a key driver of economic conditions. . Lower oil prices could curb inflation while accelerating economic growth by reducing costs for businesses and consumers. That would give the Fed more room to ease policy even as the economy expands.
audience around the world
President Trump has extended his call for interest rate cuts to central banks around the world, urging concerted action to boost growth. “Interest rates should come down around the world,” he said, positioning monetary policy as a global tool to counter economic headwinds.
The message resonated with President Trump's broader economic philosophy, which prioritizes growth and market strength. But it remains to be seen whether other countries will follow Trump and the Fed's lead.
Fed's next meeting
The Fed's next policy meeting is scheduled for January 28-29, when interest rates are expected to remain unchanged as officials assess the impact of previous rate cuts. Some Fed policymakers have warned that progress in curbing inflation is at risk of stalling or may have already stopped. President Trump's comments suggest he will continue to monitor monetary policy closely, but so far his position appears to be consistent with the Fed's roadmap.
