Trump proposes halting trade with deficit countries if Fed doesn’t cut rates

President Trump raised the stakes in his long-running feud with the Federal Reserve on August 19, declaring that the US should stop doing business with countries where it runs a trade deficit if the central bank refuses to cut interest rates. The threat ties two of Trump’s favorite policy levers together: tariffs and monetary pressure. And the specific target he named, Switzerland, signals he’s willing to aim at allies as much as adversaries. The rate gap Trump keeps pointing to At the core of Trump’s frustration is a simple comparison. The US federal funds rate sits at roughly 3.5-3.75%, while countries like Switzerland maintain benchmark rates around 0-0.5%. That spread, in Trump’s framing, means American businesses and consumers are paying far more to borrow money than their counterparts in other developed economies. He argued the US should enjoy the world’s lowest interest rates, not rates several percentage points above its trading partners. “I have the absolute right to cut off all business with a country like Switzerland.” Trump didn’t stop at one country. He referenced a group of roughly 60 nations that he claims “live off the United States” through lopsided trade relations...