President Donald Trump will not 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 the various businesses.
The Washington Post reports that before becoming president, Trump borrowed more than $ 360 million in four loans from Deutsche Bank for his hotels in Chicago and Washington DC – and Doral golf facilities in Florida.
All 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 interest rate, the more money he'll save.
Lower interest rates will also help Americans pay off mortgages. But it would hurt people on fixed income with little or no debt, which count on interest from savings accounts or savings vehicles as certificates of deposit, which would pay less interest.
Trump was already benefiting when the Fed cut short-term interest rates in July for the first time in more than a decade ̵[ads1]1; by a quarter of a percentage point.
Bloomberg found that for each quarterly cut in interest rates, Trump could save $ 850,000 in annual interest payments on his loans. That would mean Trump could reap more than $ 3 million in annual savings if the Fed cut rates by a full percentage point – as Trump demands. Bloomberg estimates that Trump now owes around $ 16.3 million a year on his loans.
A percentage cut in the interest rate point is usually made during an economic emergency – and Trump claims the US economy is booming. Critics say such a cut would leave the Fed with little extra stimulus space in the event of economic craters.
Trump, unlike other presidents, has retained his business despite conflicts of interest while weighing what's best for him – against what's best for the US economy.
Powell said Friday at a Federal Reserve symposium in Jackson Hole, Wyoming, that lowering interest rates may not be enough to protect the US economy from Trump's trade policy. He said the president's trade war with China has created a "complex, turbulent" situation that threatened the economy.
"Trade policy uncertainty appears to play a role in the global downturn and weak industrial and capital spending in the United States," Powell warned.
Following the remarks, Trump again slammed Powell, indicating that he was a larger US enemy than China.
Before he was president, Trump often asked for lower interest rates, which best benefited his real estate business, the Post noted.
Trump has seized every dollar he can in business. He has been sued dozens of times for failure to pay bills in his business. He used money from his charity to pay legal settlements for his business, and was forced to close the foundation. Once, Deutsche Bank sued for someone else out of a hefty mortgage loan, according to Posten. He also escaped debt by declaring bankruptcy six times.
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