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- President Donald Trump would save millions of dollars in annual interest payments if the Fed's interest rates went down.
- Trump has issued several public attacks against Federal Reserve Chairman Jerome Powell, with the goal of reducing the Fed's rate, which would benefit several loans that Trump has taken on several properties.
- Loans have variable interest rates, which means that the lower the interest rate, the more money it will save.
- Trump insisted that the US economy was booming, but the Fed is considering cuts as financial communities prepare for the first signs of recession.
President Donald Trump has issued several public attacks on Federal Reserve Chairman Jerome Powell in an effort to reduce the Fed's interest rate. He would earn millions every year if the rates went down.
The savings come from four Deutsche Bank loans of $ 360 million that Trump borrowed five years before becoming president of its Chicago and Washington hotels and Doral golf complex in Florida, reports the Washington Post .
Loans have variable interest rates, which means that the lower rates are reduced, the more money it will save.
La Poste notes that a quarter point reduction, which is expected to take place in mid-September according to many investors, could allow Trump to save up to $ 275,000 per year. year on his loan Doral.
Bloomberg News said each quarter-point cut would save Trump $ 850,000 a year, which would generate annual savings of more than $ 3 million if the Fed lowered rates by one percentage point as requested by Trump.
The Fed cut short-term rates by a quarter of a percentage point in July, the first of these measures in more than a decade.
The move in favor of a reduction of several percentage points contrasts sharply with Trump's insistent claims that the US economy is booming as financial communities prepare for the first signs of recession.
Fed officials are apparently divided on the opportunity to further lower interest rates in September, and Powell said Friday at a Federal Reserve symposium that lower rates in the Fed may not be enough to protect the US economy from Trump's trade policy.
This triggered an almost immediate reaction from Trump, who defended the presidential historic precedent by retaining his business interests despite repeated accusations of conflict of interest. Trump asked Twitter "we have a very strong dollar and a very weak Fed", and attacked Powell as an "enemy" comparable to China.
"As usual, the Fed has done nothing! It's amazing that they can" talk "without knowing or asking what I'm doing, which will be announced shortly," Trump wrote on Twitter after Powell's speech. "We have a very strong dollar and a very weak Fed, I will work" brilliantly "with both, and the United States will do a great job, my only question is who is our biggest enemy, Jay Powell or President Xi? "
Trump has a well-documented past in his efforts to protect and strengthen his business interests, including using the money from his charity to pay legal settlements for his businesses, suing Deutsche Bank for a refund of his loan mortgage and declaring bankruptcy six times.
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