President Donald Trump, speaking at the World Economic Forum on Thursday, called for future interest rate cuts after falling oil prices, in line with expectations of more rate cuts from the Federal Reserve. The speech is Trump’s first significant remarks on monetary policy since taking office three days ago.
Trump, speaking via video from the US, said, “With oil prices low, I will demand that interest rates fall immediately, and they should likewise be low all over the world.” Swiss alpine town. His comments suggest a conditional approach, linking monetary policy to energy markets.
A rare agreement with the Fed
Trump’s comments are notable for being in line with the Federal Reserve’s current approach. The central bank, led by Chairman Jerome Powell, has signaled plans to cut interest rates twice more this year, with additional cuts likely in 2026 and 2027. The Fed’s stance reflects expectations that inflation will remain subdued even as the unemployment rate remains low. The economy grows faster than the long-term capacity of the central bank.
This alignment contrasts sharply with Trump’s first term, during which he frequently criticized the Fed for raising rates.
linking rates to oil
Trump’s call to link 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 falling below $70 a barrel.
While the Fed generally avoids direct links between monetary policy and commodity markets, Trump’s comments suggest he views oil prices as a key driver of economic conditions. Lower oil prices, by reducing costs for businesses and consumers, could accelerate economic growth as well as slow inflation. This will give the Fed scope to further ease policy even in a growing economy.
a global audience
Trump extended his rate-cutting argument to central banks around the world and urged coordinated action to stimulate growth. “They should be unleashed all over the world,” he said, framing monetary policy as a global tool to counter economic adversities.
This message matches Trump’s broader economic philosophy, which prioritizes growth and market forces. However, it remains to be seen whether other countries will follow Trump and the Fed’s lead.
Fed’s next meeting
Rates are expected to remain unchanged at the Fed’s next policy meeting on Jan. 28-29 as officials evaluate the impact of earlier cuts. Some Fed policymakers have warned that progress on reducing inflation may be at risk of stalling or may have already stalled. Trump’s comments suggest he will continue to monitor monetary policy closely, but for now, his position appears to be in line with the Fed’s roadmap.
