President Donald Trump's call for lower interest rates from the Federal Reserve stands to benefit his business properties, because of variable rate loans signed before he was elected, The Washington Post reported.
"It will reduce his borrowing costs quite a bit if he gets what he wants," Northwestern finance professor Phillip Braun told the Post.
His savings throughout the Trump Organization might even be in the millions annually, depending on the loan agreements and amounts.
The call to lower interest rates would devalue the U.S. dollar, which is strong against declining monetary strength in other currencies worldwide. A strong dollar, as President Trump's economy as built, makes it harder for international investment in the U.S. with weaker currencies to exchange.
"I don't think the Fed should be accommodating Trump's trade war, and the risk is potential inflation and the reputation of the Fed in the future," Braun told the Post.
President Trump has not divested from his Trump Organization properties, leaving the management to his sons Donald Jr. and Eric Trump and spurring critics to claim violations of the Constitution's emoluments clause. A rate reduction would mean the family business stands to save between $600,000 and $1.1 million annually on one of the larger loans at their Doral golf resort in South Florida, if interest rates are reduced as much as one full point as the president seeks, according to the report.
"Interest rates are very critical to the real estate industry, and [Trump has] spent his whole career there, so he has strong opinions about where interest rates should be," Federal Reserve Bank of St. Louis President James Bullard told the Post. "Every real estate person I've ever met in my life has always wanted lower rates in all circumstances, so I think that's part of [Trump's] nature."
President Trump has called for interest rate reductions to keep the U.S. economy growing against slowdowns worldwide. Wall Street investors told the Post a quarter-point reduction in mid-September is possible, with another one potentially coming before Christmas.
"If you're a consumer borrower with a car loan or a credit card, a quarter-point reduction is significant savings," University of Maryland’s business professor Clifford Rossi told the Post. "[Trump] has more loans and a bigger dollar size, so he would get certainly a larger reduction on the amount owed than most Americans out there."
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