<a href="https://reason.com/2025/07/30/the-federal-reserve-rightly-rejects-trumps-calls-for-lower-interest-rates/" target="_blank">View original image source</a>.
The Federal Reserve has officially given President Donald Trump a reality check, keeping interest rates between 4.25 and 4.50 percent. This decision seems like it’s just the latest chapter in the ongoing saga of Trump trying to charm the Fed Chair, Jerome Powell, into slashing rates like they’re on clearance! In his typical flamboyant fashion, Trump has called for a drop to a mere 1 percent, arguing that we need “the lowest rates in the world.” Spoiler alert: Earle from the American Institute for Economic Research thinks that would be like pouring gasoline on a fire; it’s already a recipe for disaster!
The Fed’s steadfast approach makes sense when you consider the inflation landscape. You see, back when the Fed held rates down to nearly zero during the COVID-19 pandemic, they thought they were scoring a win for the economy. But in reality, it only magnified inflation pressures that we’re dealing with today. Who knew that keeping rates low for too long might turn into a housing affordability nightmare? Earle highlights that the issue isn’t just rates; it’s the “decade of cheap money” that fueled skyrocketing prices.
It’s always something with the Fed and Trump, isn’t it? While the president might dream of a rate cut utopia, the Fed’s cautious stance could lead to more strategic policy moves down the road. It’s like they’re not just playing checkers; it’s a full-on game of chess! So, what do you think? Should rates be lowered now, or has the Fed got it right? Let the debates begin!
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