Is Trump the Reason the Fed Is Cutting Rates?

President Donald Trump's repeated calls for easier monetary policy may not be what's driving the Federal Reserve to cut interest rates on Wednesday.

But Trump's policies have set the table for it.

His aggressive tactics on trade, including 25% tariffs on $200 billion of Chinese goods that prompted retaliatory duties on U.S. exports, have made companies uncertain about the future and more hesitant to invest.

The Fed's beige book, a collection of economic anecdotes from around the country, now regularly features an escalating and eclectic collection of trade-related impacts.

In the edition circulated ahead of this week's Fed meeting, a company in the Northeast complaining about the cost of keeping track of tariffs and a West Virginia rubber manufacturer saying trade wars had hurt demand from Chinese customers were among dozens of examples.

The impact is in the hard data as well. A report last week showing the U.S. economy grew at a 2.1% pace in the second quarter featured the first drop in business investment since 2016, and trade overall was a net drag on growth.

And it is one factor in the global manufacturing chill, exacerbating weakness from longstanding factors like aging demographics in Europe and Japan.

Trade uncertainty, weak business investment, and sluggish growth abroad are all likely to top Fed Chairman Jerome Powell's list when he explains why the Fed is cutting rates, and why more rate cuts may be ahead.

The Fed is expected to lower its benchmark borrowing rate by a quarter percentage point to between 2.00% and 2.25%.