President Donald Trump is continuing to call for the Federal Reserve to decrease interest rates amid his push to highlight Republican affordability accomplishments ahead of midterms.
“As the Trump administration continues to address the underlying causes of Biden’s economic disaster—from fiscal mismanagement to overregulation—inflation is now trending towards its target, and the environment is ripe for the Fed to cut rates and deliver interest cost relief for homebuyers and businesses to keep fueling America’s economic resurgence under President Trump,” White House spokesman Kush Desai told The Daily Signal.
This comes as the president is increasing his focus on selling voters on his affordability accomplishments ahead of midterms.
“The president is very keyed into what’s going on, and he recognizes, like anybody, that it takes time to do an economic turnaround, but all the fundamentals are there, and I think you’ll see him be very, very focused on prices and cost of living,” deputy chief of staff James Blair told Politico’s Dasha Burns.
But the push to lower interest rates could sabotage affordability, as more money enters the economy, potentially increasing the inflation rate, according to economist and Unleash Prosperity co-founder Steve Moore. Yet Trump is not expected to change course on calling the Fed to lower interest rates.
Rather, Trump believes lowering rates will reduce high borrowing costs, which are part of the current affordability crisis, said EJ Antoni, Heritage Foundation chief economist and former Trump nominee for the Bureau of Labor and Statistics.
“Things like homeownership are so unaffordable right now, not just because home prices are so high, but also because the interest rates are so high, and both are pushing up your monthly mortgage payment,” Antoni told The Daily Signal.
“Getting those interest rates down would definitely help with affordability because it’s going to reduce consumers financing costs,” he continued.
Trump told Fox News’ Laura Ingraham this week that he still wants to lower interest rates.
Former President Joe Biden “increased the interest rates and I have a lousy Fed person who’s gonna be gone in a few months, fortunately. I have a guy, ‘Too Late.’ You know, Jerome Powell, we call him ‘Too Late.’ He was too late on everything except when it came to before the, you know, the Democrat, so-called Democrat election, which didn’t work,” Trump said. “But we’re gonna get interest rates down. But even with interest rates up, the economy is the strongest it’s ever been.”
While Moore is skeptical cutting rates will make life more affordable, he says the Trump administration can score points by bringing health care costs down.
“People are looking at 10% to 12% to 15% increases in their premiums next year,” he said. “So that’s going to be a huge, huge burden on families, and it’s going to drive up overall inflation. Those are huge increases in health care costs to families in terms of the premiums they pay monthly.”
He said the tax cuts in the “One Big, Beautiful Bill” will resonate positively with voters by increasing affordability.
“A lot of people are going to get a big reduction in their taxes when they change their withholding next year, so there’s going to be a big after-tax increase in people’s paycheck starting in January,” he said.
Inflation is at about 2.8%, which is an enormous improvement from an average of 6% under Biden, Moore said. Still, the White House needs to message properly on this as Americans are struggling with the cost of living.
“He’s got to message better that if you’re upset about higher prices, the best thing to do would be to to blame that on Biden and his spending spree,” he said, “which is really what caused the big bulletin of inflation in the first place.”
“We still need to get the inflation rate down to 2%,” he continued. “We’re still running at 2.8%, so we’re still above the Fed’s target. There’s work to be done to bring inflation down, but it’s come down very considerably from the from the early years of Biden, when the inflation rate spiked up to 9%. That’s why people are still paying high prices for food, and they’re still paying high prices for health care, rent, and utilities because of that inflation that was built in in the early years of the Biden presidency.”
