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Wall Street Journal chief economics correspondent Nick Timiraos quickly saw the flaw in President Donald Trump’s Wednesday rant against Federal Reserve Chair Jerome Powell’s refusal to lower interest rates.
“Housing in our Country is lagging because Jerome ‘Too Late’ Powell refuses to lower Interest Rates,” Trump said in a post on Truth Social. “… Our rate should be three points lower than they are, saving us $1 trillion per year (as a country). This stubborn guy at the Fed just doesn’t get it — Never did, and never will. The Board should act, but they don’t have the courage to do so!”
Timiraos pointed out a glaring fact regarding the likelihood of interest expenses falling by $1 trillion per year.
“The U.S. spent $1.1 trillion on interest expenses in 2024, and so there’s almost no way this claim is remotely true,” said Timiraos on X.
Timiraos went on to post that Trump’s own Council of Economic Advisers chair last year voiced concerns that lower mortgage rates might stoke housing costs, including rent, mortgages, property taxes, and utilities.
“Okay, but what happens if lower mortgage rates start pushing home prices and rents back up?” CEA Chair Stephen Miran posted in January 2024.
Timiraos did not leave his comment hanging on X without follow-up, however. When a critic claiming to be a “macro investor” argued that interest expenses “would fall by $1 trillion” if Trump got rates to near zero, Timiraos responded by quote-posting an answer X owner Elon Musk’s “Grok” chatbot wrote saying the critic’s claim “overstates reality.”
Like his claim on interest rates, Trump has resorted to fuzzy math in the past. Economists routinely dismiss Trump’s description of tariffs as a tax on foreign nations, and must remind the reading public that his threat to hit places like Brazil with a 50 percent tariff on all imported goods will likely hurt everyday Americans far more than the Brazilian government.
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