President Trump’s former communications director, Anthony Scaramucci, has suggested that the Federal Reserve could reduce interest rates following the tariffs. Scaramucci told MSNBC that the economy is weakening and a 50-basis-point cut from the Federal Reserve in September could be achieved. Trump has been urging Federal Reserve Chair Jerome Powell to lower rates and threatened to fire him over inaction. However, Trump decided against the move to avoid market disruption.
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 praised Trump for negotiating tariff rates expected to generate billions. Scaramucci argued that the economy is doing better than expected, but that this is due to front-loading and the impact of tariffs on activity.
White House trade adviser Peter Navarro suggested that the Federal Reserve 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, and corrected May’s report to reflect the creation of 19,000 jobs compared to an initial report of 144,000. Navarro argued that if the Federal Reserve had gotten that data when it should have, the Federal Reserve would have lowered interest rates by at least 50 basis points.
