BURSTPresident Trump's former communications director Anthony Scaramucci on Friday said the Federal Reserve could reduce the interest rate following the onslaught of tariffs.
“I think the economy is weakening and you may even get a 50-basis-point cut from the Federal Reserve in September,” Scaramucci told MSNBC.
Trump has been urging Federal Reserve Chair Jerome Powell to lower rates and has threatened to nix him over inaction.
However, ultimately the leader decided against the move in an effort not to rattle the markets.
Economists who previously predicted a recession due to fluctuating trade policy have now seen gains and some including “Shark Tank” investor Kevin O’Leary have lauded Trump for negotiating tariff rates expected to generate billions.
“The economy is doing better than people had expected, but I think that’s a lot of front-loading, Joe. And just to use that Wall Street term, people are looking at those tariffs, they front-loaded a lot of activity before those tariffs went into effect, the result of which you’ve had decent numbers now, but you are seeing some deceleration,” Scaramucci said earlier on the segment.
“And of course, a lot of American companies, like General Motors, who took an $800 million charge to absorb some of those tariffs, are not going to be able to do that permanently unless there’s more flexibility on the tariffs. So it’s a mixed bag, in quick summary,” he added, evaluating the financial impact of Trump’s first six months in office.
White House trade adviser Peter Navarro said the Fed may have cut interest rates earlier if recent job reports were more accurately presented.
The Bureau of Labor Statistics reported that 73,000 jobs were created last month after correcting May’s report to reflect the creation of 19,000 jobs compared to an initial report of 144,000. The Bureau also corrected the number from June to 14,000 job adds after an initial report of 147,000.
“It’s is that if we had gotten that data when, when we should have got that data, the Federal Reserve yesterday would have lowered interest rates by at least 50 basis points. So you think so kind of incompetence or political no question about it,” Navarro said during an appearance on NewsNations’ “The Hill with Blake Burman.
“I mean, look, you had three months that were two months that revised significantly downward, one which was lower than expectations. I mean, the Fed, that’s a completely different picture. I mean, there was a strong case for a 50 day there’s an overwhelming case for a 50 basis point cut,” he added.