Federal Reserve

Trump says if Fed cuts interest rates, US will win trade war: 'It would be game over, we win!'

Key Points
  • In the latest salvo in the tariff war with China, Trump predicts that Beijing will cut interest rates.
  • If so, he says, the Fed should do so, too.
  • That would be "game over, we win!" he tweets.
Trump says US will win trade war if Fed cuts interest rates

President Donald Trump predicted Tuesday that China's next move in the trade war will be a rate cut, and he pushed the Federal Reserve to follow suit in what he said would lead to a clear victory for the U.S.

In a tweet that amounted to the latest salvo in the tariff dispute between the two nations, the president ramped up his pressure on the Fed to ease monetary policy.

He said that should the central bank meet a China rate cut with one of its own, that would be "game over, we win!"

Trump tweet

The White House and Beijing have hit an impasse in their ongoing trade negotiations. Washington is looking for a lowering of barriers into China and for the nation to halt the theft of intellectual property. As recent talks stalled, China retaliated against Trump's latest round of tariffs, announcing plans Monday to slap new levies on $60 billion worth of American goods.

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Trump's remarks on Tuesday come amid market volatility spurred by uncertainty over the direction of the talks and how long they might continue before a solution is reached.

In earlier tweets, Trump insisted that he will only accept a "great deal" for the U.S.

Trump tweet 2

tweet 3

Along with the heat he has placed on China, Trump has leaned hard on the Fed to cut its benchmark interest rate. The central bank raised rates four times in 2018, but markets now are pricing in a rate cut as soon as October.

Minneapolis Fed President Neel Kashkari told CNBC on Monday that he thinks monetary policy for now is correct.