Donald Trump Has Already Gotten the Interest Rate Cut He Wants

NOTE: Shortly after I wrote this post, the Fed cut rates by half a point. Sometimes whining works.

Donald Trump is whining on Twitter yet again that the Federal Reserve is keeping short-term interest rates too high. He’s been beating this drum for a while, so obviously it has nothing to do with the coronavirus. It’s solely because Trump wants the economy to be as strong as possible while he’s seeking reelection.

Putting that aside, it would probably be a good idea for the Fed to loosen a bit anyway. It’s low-risk insurance. At the same time, the thing we (and Trump) should really care about is long-term interest rates, since that’s what affects economic growth the most. In fact, the primary purpose of lowering short-term interest rates—which the Fed controls—is to nudge down long-term rates—which the Fed doesn’t control. But as it turns out, that’s already happened:

Over the past year long-term rates have gone down about 1.5 points. In just the last month they’ve gone down half a point. They are currently at levels below anything Barack Obama enjoyed.

I doubt that Trump knows this, but he’s already gotten the benefit of a huge reduction in the interest rates that really matter. He should quit griping.

THE END...

of our fiscal year is Thursday, June 30, and we have a much larger fundraising gap than we can easily manage with only days left to go.

Right now is no time to come up short: If you value the hard-hitting, democracy-protecting, justice-advancing journalism you get from Mother Jones, please help us keep charging as hard as we possibly can with a much-needed and much-appreciated donation today.

payment methods

THE END...

of our fiscal year is Thursday, June 30, and we have a much larger fundraising gap than we can easily manage with only days left to go.

Right now is no time to come up short: If you value the hard-hitting, democracy-protecting, justice-advancing journalism you get from Mother Jones, please help us keep charging as hard as we possibly can with a much-needed and much-appreciated donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate