Trump's Rate Cut Dreams Deflated by Rising Inflation

President Donald Trump has been trying to lower interest rates for months, claiming it would be 'Rocket Fuel' for economic growth. However, his efforts have been met with resistance from the Federal Reserve, and borrowing costs have actually increased.

Since the war in Iran began at the end of February, oil prices have risen, leading to higher inflation. The government is also feeling the pinch, as it has spent $827 billion this fiscal year on servicing the national debt, more than it has devoted to national defense.

The situation became clear when Kevin Warsh, Trump's new Fed chair pick, said in his second press conference that inflation continues to run hot but offered no clear guidance on how to fix the problem. Interest rates are rising, and 30-year U.S. Treasury bonds have reached their highest levels in nearly two decades.

Trump has largely ignored the jump in interest rates and has portrayed the economy as booming, despite the government's recent report that annual growth rate for the prior three months was a sluggish 1.5%. The president said at a Cabinet meeting last week, 'We have the most successful environment that we've ever had.'

The higher interest rates are weighing on voters ahead of the midterm elections, making it difficult for Republicans to show clear progress on affordability.