President Donald Trump is demanding that the Federal Reserve immediately lower interest rates to boost economic growth and global competitiveness.
"With oil prices going down, I'll demand that interest rates drop immediately, and likewise, they should be dropping all over the world," he said Thursday during a virtual speech at the World Economic Forum, per The Associated Press.
When asked later about his remarks, Trump told reporters, "I think I know interest rates much better than they do," according to USA Today.
"And I think I know it certainly much better than the one who's primarily in charge of making that decision," he added, alluding to Federal Reserve Chair Jerome Powell. "But no, I'm guided by them very much, but if I disagree, I will let it be known."
While he cannot unilaterally influence the Federal Reserve's decisions on interest rates -- the central bank is politically independent -- Trump's demand underscores his ongoing frustrations with its policies.
The president has been outspoken about the need for lower interest rates, arguing that they could spur economic growth, stimulate investment and keep the U.S. competitive on the global stage.
The Federal Reserve's approach to interest rates is more complex. It makes decisions based on a variety of economic indicators, with inflation and unemployment being key factors. Interestingly, unemployment is at a historically low 4.1% and inflation is back down to 2.4%, the AP noted.
While lowering rates could stimulate short-term growth, analysts warn that it also carries the risk of sparking inflation and creating economic instability, potentially leading to more serious long-term consequences.
As the Federal Reserve prepares for its first policy meeting under the new administration, expectations are that it will hold interest rates steady, despite the president's calls for immediate cuts.
The central bank has been cautious in adjusting its policy, having previously raised rates to curb inflation, and it is likely to continue prioritizing long-term economic stability over short-term political pressures.
"Anyone hoping for the Fed to ride in as the cavalry and rescue you from high interest rates anytime soon is going to be really disappointed," Matt Schulz, LendingTree's chief credit analyst, told CNBC.
Analysts predict that consumers are unlikely to see relief from high borrowing costs anytime soon. Credit card rates remain high, mortgage rates have increased and auto loan rates are also on the rise.