Trump Calls on Federal Reserve to Adjust Interest Rates After Report Shows 162,000 New Jobs Created

U.S. President Donald Trump has reiterated his call for reduced interest rates and has threatened to cease trade with countries that have trade surpluses with the United States after the addition of 162,000 jobs in August.

U.S. Job Growth Surpasses Expectations

The U.S. Bureau of Labor Statistics announced on Friday that nonfarm payrolls grew by 162,000 in August, with the unemployment rate unchanged at 4.1%. Economists surveyed by Reuters had anticipated the economy would add approximately 56,000 jobs.

This August increase significantly outperformed the average monthly gain of 31,000 from the previous year. The number of unemployed individuals remained stable at 7 million, while the labor force participation rate inched up to 61.6%.

Revisions to previous data reinforced the positive trend. The BLS adjusted June’s increase from 20,000 to 31,000, and July’s figure was revised from a loss of 23,000 jobs to a gain of 21,000. Consequently, combined employment growth for July and August was 55,000 higher than initially reported.

Food services and drinking establishments contributed 59,000 new jobs in August, significantly exceeding their 12-month average of 12,000 positions. Local government education added 42,000 jobs, while manufacturing saw an increase of 16,000 positions.

However, information sector companies eliminated 23,000 jobs, including reductions among computing infrastructure providers, publishers, and broadcasters. The healthcare sector saw an increase of 13,000 jobs but fell short of its monthly average gain of 32,000 from the past year.

The BLS reported that hourly earnings grew by 0.3% from July and rose by 3.1% year-over-year. The average workweek extended by 0.1 hour to 34.4 hours.

The latest statistics partially offset previous concerns highlighted in the last employment report. In August, crypto.news noted a drop in payrolls of an initially calculated 23,000 in July, which had led to a surge in Bitcoin, pushing its price above $65,000 as traders lowered their expectations for an additional rate increase.

Trump Links Rate Demands to U.S. Trade Policy

In light of the August employment report, Trump utilized a Truth Social post to assert that the strength of the U.S. economy warrants a reduction in borrowing costs by the Federal Reserve.

“Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short while ago!” Trump stated.

The president further claimed that the United States should maintain “the lowest rate of any country in the World, akin to ‘the old days.’” His calls for lower rates contradict market reactions, where robust employment data heightened expectations for a potential rate hike during the Fed’s upcoming meeting on September 15–16.

Trump also tied monetary policy to his trade stance, threatening actions against nations that export more to the United States than they import.

“LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” Trump stated, as reported by Reuters.

In another segment of the post, Trump expressed that high interest rates place the U.S. at “a very unfair disadvantage.” He urged Fed officials to “act patriotically for a change” and suggested that lower borrowing costs would benefit the U.S. economy more effectively than tariffs.

The Federal Reserve conducts its interest rate decisions independently through the Federal Open Market Committee (FOMC), relying on economic indicators around employment and price stability rather than direct guidance from the White House.

Trump’s trade threat did not specify which countries would be affected, when it might take effect, or the legal avenues his administration might pursue. Reuters indicated that he would halt trade with countries with which the U.S. has a trade deficit if the Fed does not lower rates.

A prior July tariff announcement involving 60 trading partners had previously driven Bitcoin down below $65,000, as rising Treasury yields pressured investors and resulted in numerous forced liquidations of leveraged crypto positions.

Bitcoin Drops Below $80,000

After Friday’s trading session began positively, Bitcoin reached an intraday high of roughly $82,262. However, after the payroll data release, selling intensified, dropping BTC from about $81,600 to near $79,800 in a matter of minutes.

This downward shift wiped more than $2,000 off Bitcoin’s price, pushing it below the $80,000 mark. This came on the heels of a strong August rally that had seen BTC appreciate by approximately 25%, and U.S. spot Bitcoin exchange-traded funds attracted $3.52 billion in net inflows across 16 of the last 21 trading sessions.

Data from CoinGlass indicated that around $251 million in leveraged crypto positions were liquidated within four hours post-employment report release, with long positions totaling approximately $216 million and shorts accounting for $35.14 million.

Bret Kenwell, a U.S. investment analyst at eToro, informed Reuters that investors might view the employment data through a “good news is bad news” lens, potentially impacting stocks and recovering crypto assets like Bitcoin.

Kenwell explained that the Fed perceives the labor market to be near full employment, thus prioritizing inflation as its core concern. In this context, strong job growth diminishes the necessity for lower credit rates to bolster the economy.

A Fed policy analysis conducted on September 3 indicated that Bitcoin was already facing risks to its August gains due to prevailing rate expectations before the payroll report. Earlier that week, CME FedWatch indicated a 66% probability for a quarter-point rate hike in September, with oil prices surpassing $90 and ongoing inflation presenting challenges for policymakers.

Raising U.S. rates could impact domestic crypto investors by enhancing returns on government debt and other income-generating assets. Kenwell pointed out that this connection arises from capital competition, allowing investors to secure higher yields without the price risks associated with Bitcoin.

Increased Fed Rate Expectations Post-Payrolls

After the jobs report, Fed funds futures reflected a 61% likelihood of a rate increase at the September meeting, up from a previous 52%, according to Reuters. Another market report from Reuters suggested a post-release probability of about 59%.

The stronger job figure replaced an earlier 54% probability provided in a previous report, likely influenced by different timing within the session. It’s important to note that interest rate probabilities can fluctuate throughout the trading day as positions are adjusted.

After the jobs data was released, U.S. Treasury yields rose, with the two-year yield—sensitive to policy changes—gaining five basis points to reach 4.38%. The 10-year yield ticked up by one basis point to 4.776%, while the dollar index rose by 0.2%, and gold prices fell by 1.2%.

In response, Citigroup adjusted its forecast for the Fed’s next rate cut from late 2026 to June 2027. The bank now anticipates three quarter-point cuts in June, September, and December 2027, while previously predicted reductions in October, December 2026, and January 2027 were removed.

Federal Reserve Governor Christopher Waller noted that the upcoming inflation report would significantly impact his decision in September. His earlier comments had previously decreased the probability of a rate increase to 38% on Polymarket, as previously covered in Fed reporting.

The BLS is scheduled to release the producer price index for August on September 10, followed by the consumer price index on September 11. The Federal Open Market Committee will commence its two-day meeting on September 15, concluding with an interest-rate decision announcement on September 16.