OPINION:
For the first 16 months of President Trump’s second term, he applied public pressure to the then Federal Reserve chairman, Jerome Powell, to lower interest rates so he could bring America into what he called the “Golden Age.”
Despite Mr. Trump’s constant pressure, including public humiliation and a federal investigation into malfeasance, Mr. Powell mostly balked at the insistence that the U.S. have “the lowest interest rates in the world.”
But just weeks ago in Jackson Hole, Wyoming, the newly appointed, Trump-backed Fed chair, Kevin Warsh, said at the central bank’s annual summit, “If the Fed gets inflation wrong and judges the economy wrong, who get the worst of it? … [T]he Fed’s predominant focus right now should be on prices.”
Mr. Trump subsequently countered Mr. Warsh’s statement in a Truth Social post by saying that, because of the better-than-expected August jobs report, the Fed should “[l]ower the interest rates because the USA is a much stronger credit than it was just a short time ago! A STONG COUNTRY MEANS A LOWER INTEREST RATE — IT’S BETTER CREDIT … Very simple!”
Whom do we believe here?
I believe that Mr. Trump has much more on the line and has far more to lose or gain over interest rates, and that he knows what he’s talking. Ultimately, the U.S. having the lowest interest rates in the world will very likely usher in the “Golden Age” for America.
Since Mr. Trump has been so adamant about this position, the Fed should acquiesce to his demand.
Mr. Warsh should simply say to the American people, “Due to the president’s insistence, for better or worse, we’re going to do it his way and slash interest rates down below one percent, which would give most consumers a mortgage in the 3.0 to 3.75 point range.”
President Trump has earned the right to be given the benefit of the doubt on economic issues.
LUANA DUNN
Glen Burnie, Maryland
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