Trump to Kudlow: ‘This country should have the lowest interest rates in the world’
President Donald Trump said the U.S. should have the "lowest interest rates in the world" and argued that rate cuts would significantly reduce federal borrowing costs during an interview Tuesday on FOX Business’ "Kudlow."
"This country should have the lowest interest rates in the world," Trump told host Larry Kudlow. "We keep the world going."
Trump tied interest rates to government interest expenses, saying that changes of a few points could significantly alter federal finances.
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"Every point is $600 billion," Trump said. "All he has to do if we went down two points, we don't have a deficit anymore," he claimed.
Trump also pointed to recent market milestones as evidence of economic strength, telling Kudlow he remembers predictions that the Dow Jones Industrial Average reaching 50,000 would be considered a "miracle" by the end of a presidential term.
"I remember when I first won, they said if he gets the Dow up to 50,000 by the end of his fourth year, he will have done miracles," Trump said. "And we’re at the end of the first year."
Trump added, "We’ve had a very good run, and we want to keep it going."
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Trump credited falling energy prices for easing costs, telling Kudlow he recently saw gas prices as low as $1.85 in Iowa and saying prices in other parts of the country had "broken $2 a gallon."
"And that’s like a major tax cut," Trump said.
In the interview, Trump pushed back on the idea that strong growth should automatically prompt tighter monetary policy, arguing that markets and policymakers react negatively to inflation concerns.
"We’re old enough to remember when the stock market, when there was good news, the market went up and was bad news, the market went down," Trump said. "That’s the way it should be."
Trump suggested that dynamic has shifted, claiming markets can fall on positive economic news because of inflation fears and expectations about rates.
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"They have the yips," Trump said, comparing the reaction to golfers who "can’t sink a three-foot putt" when they hear the word inflation. "Well, growth doesn’t mean inflation."
"We have to go back to the old system when we have good news, the market should go up, and we have bad news, the market should go down," Trump said, adding, "We’ll take care of inflation as it comes."
Trump praised Kevin Warsh, his nominee connected to the Federal Reserve, in the interview’s discussion of monetary policy, saying Warsh would be influential.
"I think he’s somebody that’s going to be a real influencer," Trump said. "I think he agrees with what I’m saying."
Trump argued the U.S. has historically maintained comparatively low borrowing costs.
"Let’s go back again. Another 20, 25 years. We were always the lowest interest rate," Trump said. "We used to pay like almost nothing."
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He then contrasted that with today, claiming, "Now we’re like number 38 because we have had stupid people running our country."
Trump illustrated his view by recounting a dispute with Switzerland, which he said benefited from low tariffs and trade imbalances with the United States.
"We had an incident with a very nice country, Switzerland," Trump said. "They were paying no tariffs, sending stuff over here like nobody could believe. And we had a $42 billion deficit and we weren’t taking anything."
"I said, ‘You may be a small country, but we have a $42 billion deficit with you,’" he added.
Trump said he initially imposed a 30% tariff on Swiss imports before later raising it to 39% following pushback from Swiss officials.
The U.S. later agreed to lower tariffs on certain Swiss goods to 15% from 39% under a trade framework announced last year, Reuters reported.
In a wide-ranging exchange with Kudlow, Trump sharply criticized Federal Reserve Chair Jerome Powell, arguing rates should be lower.
"He’s so bad that, I mean, interest rates should have been cut. We should be two points lower," Trump said.
Kudlow closed the interview by thanking the president for his time.