Trump Calls for Lower Oil Prices, Cut in Interest Rates

US President Donald Trump hinted at a possible clash with Federal Reserve Chairman Jerome Powell and other central bankers during his virtual speech to the World Economic Forum in Davos, Switzerland, saying he would demand lower interest rates.

"I will ask Saudi Arabia and OPEC to lower oil prices, and as oil prices fall, I will ask for interest rates to be lowered immediately," Trump said.

"Likewise, interest rates should be lower all over the world," he told a gathering of business and political leaders in Davos, referring to the monetary policy direction he seeks in the United States, according to Yahoo Finance.

These statements are the latest indication of a possible collision course between Trump and Powell in the coming months.

Later on Thursday, during remarks he made in the Oval Office, Trump reiterated his comments, saying he wants interest rates to fall significantly and that he believes the Fed will listen to him. He added that he expects to speak directly with the Fed chairman at the appropriate time.

Fed officials’ expectations suggest that interest rates may remain unchanged for a while, after cutting them by a full percentage point at the end of 2024. Investors are betting that rates will not be changed at the next meeting.

In fact, Fed officials recently lowered their forecast for additional rate cuts in 2025 from four to two, citing concerns about the impact of Trump administration policies.

Trump’s recent rhetoric has raised concerns about the Fed’s independence. On the campaign trail, Trump has repeatedly criticized Powell, saying he is often wrong. Although Trump said last month that he has no intention of firing Powell before his term ends in 2026, the debate over the administration’s relationship with the Fed continues.

On his part, Powell has stressed that there is no legal authority to remove him before his term ends.

Meanwhile, Trump's Treasury Secretary nominee, Scott Bessent, noted the importance of maintaining a good relationship with Powell, stressing that the Fed must remain independent, but adding that Trump will express his views as president.