Trump pushes Fed on rates after 162,000-job gain

U.S. President Donald Trump has renewed his demand for lower interest rates and threatened to halt trade with deficit countries after employers added 162,000 jobs in August.

US jobs growth has exceeded forecasts

The U.S. Bureau of Labor Statistics reported Friday that nonfarm payrolls increased by 162,000 in August, while the unemployment rate remained at 4.1%. Economists polled by Reuters had expected the economy to add about 56,000 jobs.

August’s increase was also well above the average monthly gain of 31,000 recorded during the previous 12 months. The number of unemployed people changed little at 7 million, while the labor force participation rate edged up to 61.6%.

Revisions strengthened the report further. The BLS raised June’s increase from 20,000 to 31,000 and changed July’s estimate from a loss of 23,000 jobs to a gain of 21,000. Combined employment growth for the two months was therefore 55,000 higher than initially reported.

Food services and drinking establishments accounted for 59,000 new positions in August, compared with their 12-month monthly average of 12,000. Local government education added 42,000 jobs, and manufacturing employment rose by 16,000.

Information companies cut 23,000 positions, including losses among computing infrastructure providers, publishers, and broadcasters. Healthcare employment increased by 13,000, but the gain was below its monthly average of 32,000 during the past year.

Hourly earnings climbed 0.3% from July and 3.1% from a year earlier, according to the BLS. The average workweek increased by 0.1 hour to 34.4 hours.

The latest figures reversed part of the weakness seen in the previous employment release. In August, crypto.news reported that payrolls had fallen by an initially estimated 23,000 in July, prompting Bitcoin to rise above $65,000 as traders reduced their expectations for another rate increase.

Trump has tied rate demands to US trade

Following the August report, Trump used a Truth Social post to argue that the strength of the U.S. economy should allow the Federal Reserve to reduce borrowing costs.

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

The president also said the United States should have “the lowest rate of any country in the World, like ‘the old days.’” His demand conflicts with the reaction in interest-rate markets, where the stronger employment figures increased expectations that the Fed could raise rates at its Sept. 15–16 meeting.

Trump then connected monetary policy with his trade agenda, threatening action against countries that sell more goods and services to the United States than they buy from it.

“LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” Trump wrote, according to Reuters.

In another part of the post, Trump argued that high interest rates placed the country at “a very unfair disadvantage.” He also called on Fed officials to “be patriots for a change” and claimed that cheaper borrowing would serve the United States better than tariffs.

The Federal Reserve sets interest rates independently through the Federal Open Market Committee. Its decisions are based on employment and price stability rather than direct instructions from the White House.

Trump’s trade threat did not identify the affected countries, a timetable, or the legal mechanism his administration might use. Reuters reported only that he would stop trading with countries against which the United States runs a deficit if the Fed did not lower rates.

A July tariff announcement covering 60 U.S. trading partners previously sent Bitcoin below $65,000 as Treasury yields rose and leveraged long positions absorbed most of the related crypto liquidations.

Bitcoin has fallen below $80,000

Bitcoin’s first reaction to Friday’s trading session was positive, with the asset reaching an intraday high of about $82,262. Selling accelerated after the payroll release, pulling BTC from around $81,600 to roughly $79,800 within minutes.

The reversal erased more than $2,000 from Bitcoin’s price and returned the asset below the $80,000 threshold. The move followed a sharp August rally during which BTC gained about 25%, and U.S. spot Bitcoin exchange-traded funds received $3.52 billion in net inflows across 16 of 21 trading sessions.

CoinGlass figures cited in the original report showed that approximately $251 million in leveraged crypto positions were liquidated during the four hours surrounding the employment release. Long positions accounted for about $216 million, while short liquidations totaled $35.14 million.

Bret Kenwell, U.S. investment analyst at eToro, told Reuters that investors could interpret the employment figures through a “good news is bad news” lens, which could weigh on stocks and recently recovering crypto assets such as Bitcoin.

Kenwell said the Fed views the labor market as being close to full employment, leaving inflation as its main policy concern. Under that reading, strong hiring reduces the need to support the economy with cheaper credit.

A Sept. 3 Fed policy analysis found that Bitcoin entered the payroll release with rate expectations already posing a risk to its August gains. CME FedWatch had placed the probability of a quarter-point September increase at 66% earlier in the week, while oil prices above $90 and persistent inflation kept pressure on policymakers.

Higher U.S. rates can affect American crypto investors by raising returns on government debt and other interest-bearing assets. Kenwell attributed the connection to competition for capital, with investors able to earn higher yields without taking Bitcoin’s price risk.

Fed rate expectations have risen after payrolls

Fed funds futures priced a 61% probability of an interest-rate increase at the September meeting after the jobs data, up from 52% beforehand, Reuters reported. A separate Reuters market report placed the post-release probability at about 59%.

The stronger figure replaced the 54% probability given in the original report, which appears to have been captured at a different point in the session. Interest-rate probabilities can change throughout the day as traders adjust positions.

U.S. Treasury yields rose after the release, with the policy-sensitive two-year yield gaining five basis points to 4.38%. The 10-year yield moved one basis point higher to 4.776%, while the dollar index added 0.2% and gold fell 1.2%.

Citigroup responded by moving its forecast for the Fed’s next rate cut from late 2026 to June 2027. The bank now expects three quarter-point reductions in June, September, and December 2027 after dropping its earlier forecasts for cuts in October and December 2026 and January 2027.

Federal Reserve Governor Christopher Waller had said one day earlier that the next inflation report would carry considerable weight in his September decision. His comments had helped push the probability of an increase down to 38% on Polymarket, according to earlier Fed coverage.

The BLS will release the August producer price index on Sept. 10 and the consumer price index on Sept. 11. The Federal Open Market Committee will begin its two-day meeting on Sept. 15 and announce its interest-rate decision on Sept. 16.