Fed Rejects Trump's Rate Cut Demands Amid Election Pressure
US President Donald Trump has been trying to pressure the Federal Reserve into cutting interest rates, but his efforts have been met with resistance. The Fed recently raised its benchmark interest rate, a move that is clearly negative for the midterm elections just six weeks away.
This decision was not taken lightly, and it's clear that the Fed is committed to combating inflation. By raising the rate, they are playing catch-up with market rates, which have surged past 5% to hit a 19-year high.
Trump's logic on interest rates has been criticized by Nobel laureate economist Paul Krugman, who wrote last year that 'a hot economy is a reason to raise interest rates, not cut them.'
Trump and his allies have made similar claims about the economy being strong enough to warrant lower interest rates. However, this view has been widely debunked as 'economic bullshit'.