United States President Donald Trump said on Wednesday that his administration will not raise interest rates, underscoring his confidence in the nation’s economic strength. The statement came during his visit to South Korea, where he is attending the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, and follows his remarks highlighting that U.S. factories are booming amid a broader industrial rebound.
Monetary Policy Outlook
Trump’s remarks come at a time when the U.S. Federal Reserve is widely expected to implement another interest rate cut—its second consecutive reduction—as it navigates economic challenges stemming from tariffs and an ongoing government shutdown.
Trump says he does not expect any interest rate hikes from the Fed.
— First Squawk (@FirstSquawk) October 29, 2025
The Fed is anticipated to cut rates by 0.25 percentage points, bringing the benchmark lending rate to a range of 3.75%–4.00%. This move aims to cushion the economy against uncertainty and support the labor market, which officials say has shown signs of cooling.
Despite inflation remaining above target, the Fed’s focus appears to have shifted toward protecting employment and sustaining output growth—a stance aligned with Trump’s push for lower borrowing costs to maintain industrial momentum.
Key Economic Factors
The Fed’s decision is influenced by multiple pressures, including:
- Economic uncertainty driven by tariffs and global trade friction.
- Data disruptions caused by the ongoing government shutdown.
- Labor market moderation, with officials voicing concern over slower hiring.
- Inflation considerations, as price growth remains elevated but stable.
Former Cleveland Fed President Loretta Mester commented that while employment conditions are weakening, policymakers must avoid losing focus on long-term inflation management.
APEC and Trade Diplomacy
At the APEC summit, Trump is also expected to discuss security and trade relations with South Korean President Lee Jae-myung. The meeting underscores Washington’s broader strategy of strengthening alliances and promoting American industry across global markets.
During his Gyeongju address, Trump highlighted that “factories are booming in the United States,” reflecting confidence in domestic manufacturing resilience despite recent headwinds in the global economy.
Future Outlook
Market analysts anticipate that the Fed will continue with quarter-point cuts in its next few meetings while maintaining a cautious tone about future moves. Chair Jerome Powell may also announce a timeline to end the reduction of the central bank’s balance sheet, which expanded significantly during the pandemic era.
The broader monetary policy pivot signals a balancing act between supporting growth and containing inflation, with investors closely watching for cues on how long the rate-cutting cycle may continue under Trump’s policy direction.
Disclaimer: The information provided is based on official statements and economic reports. It is intended for informational purposes only and should not be construed as financial or investment advice.
