The Wall Avenue Journal says Trump’s name for fee cuts defies inflation actuality

The Wall Avenue Journal editorial board questions Donald Trump’s understanding of financial coverage, arguing that his current name for decrease rates of interest contradicts financial fundamentals. Trump’s demand got here on the identical day inflation rose for the third straight month, with CPI up zero.5% in January, pushing the 12-month fee again to three%.

The Journal is gated, however right here is the hyperlink should you can entry it:

• Trumponomics and Rising Inflation
  
  • The President requires simpler cash regardless that shopper costs preserve rising. Does he need even increased costs?

The editorial notes that increased tariffs, which Trump additionally advocates, usually gas inflation, making fee cuts even much less applicable. Markets reacted accordingly, with the 10-year Treasury yield leaping to four.63%, reflecting issues that persistent inflation will preserve the Federal Reserve cautious on easing.

Whereas Trump isn’t in charge for inflation after simply three weeks in workplace, the true coverage error, in line with WSJ, was the Fed’s untimely fee cuts in late 2024, which drove long-term yields increased and did not comprise worth pressures. Fed Chair Jerome Powell has since signaled endurance in additional cuts, and the editorial suggests Trump’s push for simpler cash might danger one other inflation surge, undermining his personal political standing.

AI cannot spell tariff.

***

In the meantime I am going to brace for the MAGA crowd disputing the Wall Avenue Journal’s understanding of economics 101.

This text was written by Aaron Cutchburt at www.ubaidahsan.com.



Source link