President Donald Trump has a personal conflict-of-interest that may be impacting his decisions in his public feud with Federal Reserve Chair Jerome Powell.
“President Trump stands to save millions of dollars annually in interest on outstanding loans on his hotels and resorts if the Federal Reserve lowers rates as he has been demanding, according to public filings and financial experts,” The Washington Post reported Saturday.
“In the five years before he became president, Trump borrowed more than $360 million via four loans from Deutsche Bank for his hotels in Washington, D.C., and Chicago, as well his 643-room Doral golf resort in South Florida,” the newspaper reported. “The payments on all four properties vary with interest rate changes, according to Trump’s official financial disclosures. That means he has already benefited from falling interest rates that were spurred in part by a cut the Federal Reserve announced in July, the first in more than a decade — and his payments could drop by millions of dollars more annually if the central bank grants Trump’s wish and further lowers short-term rates, experts said.”
Trump refused to disinvest himself from his businesses when he took office. The Trump Organization is currently being run by Donald Trump Jr. and Eric Trump.
“Since taking office, Trump has aggressively sought to lower interest rates and rejected the mostly hands-off approach other presidents have taken to the Fed, repeatedly blasting Chair Jerome H. Powell — whom Trump appointed to the post last year — for not falling in line,” The Post noted.
Trump could make millions off of the move.
“Beginning in 2012, Deutsche Bank provide Trump’s company with about $364 million in loans by working through the bank’s private wealth division, rather than through traditional commercial lending units, according to public loan documents. The borrowing was for two loans totaling $125 million to buy and renovate the Doral golf resort in Florida, a $170 million loan to renovate Washington’s Old Post Office Pavilion into a Trump hotel and a $69 million loan to refinance an existing Trump hotel in Chicago,” the newspaper noted.
“Trump could save at least $600,000 and as much as $1.1 million annually on just the larger of the two Doral loans if the Fed made a percentage point reduction, depending on the loan agreement, according to Clifford Rossi, a professor at the University of Maryland’s business school,” The Post noted. “Even a quarter-point reduction, which most Wall Street investors now predict will occur in mid-September, could save Trump as much as $275,000 annually on that single Doral loan.”