Trump's Criticism of 'Fake Data' Becomes the Reason for Fed Rate Cuts
U.S. President Trump was dissatisfied with the July employment report, calling it 'fake', and subsequently fired the head of the U.S. Bureau of Labor Statistics. However, Federal Reserve officials viewed this data as solid evidence of an economic slowdown and as a reason to implement the rate cuts Trump desires.
Fed Governor Bowman pointed out in a public speech: 'The latest employment report confirms some vulnerabilities in the labor market and signs of weakening vitality.' She emphasized that delaying action could lead to further deterioration of the economy.
As the Fed's Vice Chair for Supervision, Bowman announced that she would support rate cuts at all three remaining meetings this year. She, along with Governor Christopher Waller, voted against maintaining the interest rates at the July meeting, advocating for an immediate cut of 25 basis points. Investors now believe there is more than an 85% chance that the Fed will cut rates at the September meeting.
Although signs of weakness in the labor market may drive the Fed to cut rates - which aligns with Trump's expectations - this contradicts his claim that tax cuts, immigration, and trade policies are driving economic growth. (International Financial News)
