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White House calls for larger interest rate cut

2025-09-06 HKT 07:07
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  • US President Donald Trump for months has been pushing the US central bank, the Federal Reserve, to lower its benchmark rates. File photo: Reuters
    US President Donald Trump for months has been pushing the US central bank, the Federal Reserve, to lower its benchmark rates. File photo: Reuters
The White House expects the Federal Reserve to at least consider a possible larger rate cut when it meets later this month after last month's job data showed a "disappointing" labour market, US President Donald Trump's economic advisor said on Friday.

"The main market expectation is 25 basis points. But I would guess that there would be an expectation, a discussion of a higher cut, but I wouldn't expect it to happen," White House National Economic Council Director Kevin Hassett told reporters at the White House after Friday's report showed weaker job growth in August as the unemployment rate rose to a near four-year high of 4.3 percent.

The Labor Department's closely watched employment report on Friday also showed the economy lost jobs in June for the first time in 4-1/2 years. Job growth has shifted into stall-speed, with economists blaming US President Donald Trump's sweeping import tariffs and an immigration crackdown that has reduced the labour pool.

Softness in the labour market is mostly coming from the hiring side. There were more unemployed people than vacancies in July for the first time since the Covid-19 pandemic.

Trump for months has been pushing the US central bank to lower its benchmark rates, saying the cuts are needed to help bolster his economic policies and fuel growth even as some critics have raised questions about threats to the Fed's independence.

Friday's dim jobs data has raised some alarm bells and is seen likely to push Fed policymakers to seek to shore up the fragile job market with at least a 25-basis-point rate cut when they meet on September 16-17.

Some of the sharp job growth slowdown last month could be tied to a seasonal quirk. The initial August job count has tended to exhibit a weak bias, with revisions subsequently showing strength. Nonetheless, employment growth has softened considerably, averaging 29,000 jobs per month in the last three months, compared to 82,000 during the same period in 2024.

There were job losses in a number of sectors, including wholesale trade, manufacturing, construction, and professional and business services.

Hassett called the jobs report "disappointing" but blamed data collection. (Reuters)

White House calls for larger interest rate cut