President Donald Trump won’t stop haranguing Federal Reserve Chairman Jerome Powell to cut the Fed interest rate — again — now by as much as a full percentage point. One entity that would save millions annually from such a move would be Trump’s own company — along with its various businesses.
The Washington Post reports that before he became president, Trump borrowed more than $360 million in four loans from Deutsche Bank for his hotels in Chicago and Washington D.C. — and his Doral golf resort in Florida.
All of the loans have variable interest rates, according to Trump’s financial disclosure statements. That means the more he can convince Powell to lower the Fed rate, the more money he’ll save.
Lower interest rates would also help Americans paying mortgages. But it would hurt people on fixed incomes with little or no debt who count on interest from savings accounts or savings vehicles such as Certificates of Deposit, which would pay less interest.
Trump already benefitted when the Fed cut short-term rates in July for the first time in more than a decade — by a quarter of a percentage point.
Bloomberg found that for every quarter-point reduction in rates, Trump could save $850,000 in annual interest rate payments on his loans. That would mean Trump could reap more than $3 million in annual savings if the Fed dropped rates a full percentage point — as Trump is demanding. Bloomberg estimates that Trump now owes about $16.3 million a year on his loans.
A full-point rate percentage cut is typically done during an economic emergency — and Trump claims the American economy is booming. Critics say such a cut would leave the Fed with little extra stimulus space in the event the economy craters.
Trump, unlike other presidents, has retained his businesses despite accusations of conflict of interest as he weighs what’s best for him — against what’s best for the American economy.
Powell said Friday at a Federal Reserve symposium in Jackson Hole, Wyoming, that lowering rates further might not be enough to to protect the American economy from Trump’s trade policy. He said the president’s trade war with China has created a “complex, turbulent” situation that was threatening the economy.
“Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Powell warned.
After the remarks, Trump again slammed Powell, indicating he was a bigger enemy of the U.S. than China.
Before he was president, Trump often called for lower interest rates, which best benefited his real estate business, the Post noted.
Trump has grabbed every dollar he can in business. He has been sued dozens of times for nonpayment of bills in his businesses. He used money from his charity organization to pay off legal settlements for his for-profit businesses, and was forced to shut down the foundation. He once sued Deutsche Bank to duck out of a hefty mortgage, according to the Post. He has also dodged debts by declaring bankruptcy six times.
REAL LIFE. REAL NEWS. REAL VOICES.
Help us tell more of the stories that matter from voices that too often remain unheard.