Donald Trump has put pressure on Federal Reserve Chairman Jay Powell to cut interest rates.

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Donald Trump has put pressure on Federal Reserve Chairman Jay Powell to cut borrowing costs, setting up a possible clash between the two men less than a week before the US central bank decides on interest rates.

Appearing in the Oval Office on Thursday to sign a series of new executive orders, Trump said he knows rates “much better” than the Fed and wants to see them come down “a lot.”

The US central bank is widely expected to hold its benchmark rate at 4.25-4.5 percent next week, marking a pause after three consecutive cuts since September.

Trump’s plans to raise tariffs, cut taxes and crack down on immigration could hamper efforts to push inflation back to 2 percent, with the Fed showing signs of slowing this year, some officials said.

“The concerns (within the Fed) are not only about tariffs, but also about the recognition that fiscal policy is not helping to bring down inflation,” said Mahmood Pradhan, economist at Amundi.

But the Fed’s more cautious stance puts it at odds with the new US president.

Trump said on Thursday that he expects the Fed to listen to his wishes and talk to Powell “at the right time.”

“I think I know interest rates better than they do, and I certainly think I know them better than the person who is primarily responsible for making that decision,” Trump said. “I’ll make it known if I don’t agree.”

Trump promoted Powell to Fed chairman early in his term, but he has often criticized him, particularly in 2016. By not cutting rates quickly in 2019. The president indicated on the campaign trail last year that he would not try to oust Powell. Before his term ends in 2026.

“If the Fed continues to hold rates where they are and thinks it’s best to get out of low rates, there’s certainly a chance for a rift,” said Douglas Holtz-Eakin, president of the American Action Forum. Center-right policy institute.

Some economists said Trump’s policies could force the Fed to make further cuts or raise borrowing costs if rates rise.

If the administration does things that start to increase inflation, the Fed’s mandate is pretty clear – they will raise rates. And if they do, they’re going to get it (from Trump) around the neck,” said Mark Blythe, an economics professor at Brown University.

Trump used a speech to executives in Davos earlier Thursday to say he wants rates to fall “all over the world” – and told the OPEC cartel to lower oil prices to make it happen.

A few hours later, in an Oval Office speech to reporters, he brought up the theme again.

“I’d like to see oil prices come down, and when energy comes down, that will kill a lot of inflation. That would automatically cut interest rates, Trump said.

On Thursday, US allies in the pact called for more defense spending, raising fresh doubts about Washington’s commitment to NATO.

“They are not looking out for us,” he said of NATO countries. “We are waiting for them. So I don’t think we should spend, I’m not sure we should spend anything, but we should definitely help them. But they should increase the 2 percent (of GDP on defense spending) to 5 percent.

Trump’s NATO comments came a day after newly sworn-in Secretary of State Marco Rubio “reaffirmed America’s commitment” to the group during talks with the alliance’s secretary-general, Mark Rutte.

Among the other executive orders Trump signed on Thursday was one to create a national cryptocurrency repository and another to allow the release of federal files on the assassinations of President John F. Kennedy, former Attorney General Robert F. Kennedy and civil rights leader Martin Luther King. .

“The American people deserve transparency and the truth,” Trump said of the killing. “A lot of people have been waiting for this for years, decades, and everything will be revealed.”