The Wall Street Journal has criticized President Trump’s grasp of monetary policy, particularly regarding interest rates and inflation. After his comments urging lower interest rates amidst rising inflation, the Journal contended that such a stance reflects a fundamental misunderstanding of economic principles. They assert that Trump's push for lower interest rates contradicts the implications of ongoing inflation and higher tariffs. The editorial suggests that if inflation continues to rise, it could significantly threaten Trump's political standing and job approval among voters, especially considering past economic discontent under his predecessor.
Does President Trump understand money? Not money as in cash, but the supply of money, the price of money as measured by interest rates, and their impact on inflation?
But perhaps the President wants the public to look elsewhere when assigning blame for rising prices. Yet if he's trying to blame the Federal Reserve, which controls short-term interest rates, he has the analysis backward.
The layers of intellectual confusion here are hard to parse, especially since higher tariffs will mean higher prices on the affected goods.
If this persists, Mr. Trump won't have a 53% job approval rating for long.
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