Trump says the Fed should anyway cut rates even though the US and China have agreed to trade deal

US President Donald Trump speaks after announcement and preliminary agreement with China while meeting the Special Envoy and Vice Premier of the People's Republic of China Liu He at the Oval Office of the White House in Washington, DC October 11, 2019. [19659002] Nicholas Kamm | AFP | Getty Images

President Donald Trump said Friday that the Federal Reserve would still lower interest rates, even though China and the United States agreed to the first part of a trade deal.

"The Federal Reserve should cut interest rates regardless of how good this is," Trump said in the Oval Office. "We have a good economy, but we have a Federal Reserve that is out of line with the rest of the world."

"I think they should get in the way," he said.

The US Central Bank has already cut interest rates twice this year in part due to the weakness of the world economy, which has arisen because of the ongoing trade war. Friday, however, the two sides announced steps to end the trade war.

Trump announced the first phase of a trade agreement that will bring Chinese agricultural purchases to a range of between $ 40 and $ 50 billion. That phase also includes agreements from both nations on intellectual property, Trump said, as well as currency exchange agreements. In return, the United States agreed to hold tariff increases scheduled for next week. Trump also said that phase two of the deal will come right after the terms of the first are signed.

The Fed is scheduled to meet at the end of the month, with investors largely expecting a rate cut. Market expectations of lower interest rates at the end of October were 74.3%, according to CME Group's FedWatch tool.

U.S. economic growth has slowed down this year with many economists citing the trade war with China. The Fed expects GDP for 2019 to come in at 2.2%, down from 2.9% in 2018. The Fed had said growth could be worse if the trade war continued.

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