Perhaps we should be relieved that Trump is not demanding interest-rate cuts as a means of reducing inflation. That is what used to be heard from Turkish President Recep Tayyip Erdogan. Insisting that high interest rates cause inflation, Erdogan forced Turkey’s central bank to slash rates even as prices were climbing.
US President Donald Trump has made no secret of his wish for lower interest rates. He argues that cheaper borrowing would, among other things, save the government billions of dollars in debt-service payments. Who wouldn’t want that?
Unfortunately, as Mick Jagger reminds us, “You can’t always get what you want.” For one thing, inflation in the US is already running at 2.7%. That is not runaway inflation, but it is above the Federal Reserve’s 2% target, and above the level at which the Fed would normally contemplate rate cuts.
