The US economy is heading into a slowdown as the 2020 presidential elections approach.

Trump is attempting to pressure the Federal Reserve to lower interest rates in light of a slowing US economy
Trump is attempting to pressure the Federal Reserve to lower interest rates in light of a slowing US economy (AP)

White House economic advisor Larry Kudlow on Friday urged the Federal Reserve to cut interest rates to protect the US economy.

Kudlow told CNBC that it was necessary to reduce rates as a "protective measure," after earlier being quoted by Axios as saying the Fed should "immediately" cut rates by half a percentage point.

"We just don't want that threat" of higher rates, the aide said, adding that this reflects President Donald Trump's view.

"There is no inflation out there, so I think the Fed's actions were probably overdone," he said, referring to its decision to raise rates four times in 2018, with the last and most controversial increase coming in December.

Trump also took aim at the Fed's rate hikes on Friday.

"Had the Fed not mistakenly raised interest rates, especially since there is very little inflation, and had they not done the ridiculously timed quantitative tightening, the 3.0% GDP, & Stock Market, would have both been much higher & World Markets would be in a better place!" the president tweeted.

Speaking about the slowdown in the global economy that could threaten US growth, Kudlow referred to the "eurozone, virtually in a recession.

China, very, very very soft as we negotiate our trade. Troubles in Latin America."

"We don't want to threaten this great recovery," he said.

"We are, as everyone else in the world, aware of some of these external threats from around the world," he said, adding that Trump also wants the Fed to stop cutting its Treasury bill portfolio.

The advocacy of a sharp rate cut echoes the position of Stephen Moore, a conservative economist whom Trump has tapped to join the Fed.

Most economists and institutions, with the exception of the White House, predict a slump in US growth both this year and in 2020.

The Fed recently reduced its growth projection to 2.1 percent for 2019 and 1.9 percent for next year, but the Trump administration says the economy will grow by 3.2 percent this year.

The Fed's Monetary Committee left rates unchanged last week and gave up its plans for increases to the cost of credit for this year.

Source: AFP