Why the U.S. Shouldn’t Cut Rates Now: The Political Trap Behind Trump’s Demand

🧠 At First Glance, It Sounds Simple: Inflation is “under control,” so cut rates—right?

That’s what Trump claims. But behind the scenes, something else is at work.

He’s not asking for a rate cut because it’s good policy.
He’s asking because it’s good politics.

And if the Fed gives in? It won’t be a soft landing—it’ll be a power grab.

To understand what’s at stake, we need to break it down clearly:

• Is inflation really over?

• Will rate cuts help—or hurt?

• And what is Trump really trying to do?

---

1. Is Inflation Really Under Control?

May’s core PCE index rose 0.2%—which seems modest. But the surface is deceptive:

Tariff costs haven’t even hit yet.
Trump’s new tariffs haven’t passed through to consumer prices. For now, companies are eating the costs to stay competitive. But by fall, these price hikes will land on shelves—and in wallets.

Inflation expectations are just as dangerous as inflation itself.
When people think the Fed will cut, they spend more. Businesses preemptively raise prices. That alone can reignite inflation.

Sticky costs are rising.
Healthcare. Rent. Insurance. These don’t move quickly—but once they go up, they stay up. And that’s exactly what’s happening.

A rate cut now would be like throwing gasoline on embers.

It might not look like a fire yet—but it will be.

---

2. Rate Cuts Won’t Fix the Real Problem

Trump wants to “stimulate growth.” But the truth is: growth isn’t being held back by interest rates. It’s being held back by structural rot.

Consumer confidence is broken.
Real wages are flat. Benefits are shrinking. Debt is growing. People aren’t spending—not because of rates, but because they don’t feel safe.

Speculation, not stability.
Low rates will pump up stocks, crypto, and real estate. But it won’t build homes or create jobs. It’ll just inflate bubbles—again.

America’s deficit is a ticking bomb.
Sure, a rate cut would make borrowing cheaper—for now. But it also risks weakening the dollar, distorting the bond market, and scaring off investors.

And the worst part?

It drains the Fed’s ammo.
If you cut now—without a crisis—you leave yourself defenseless during a real one.

---

🔒 3. Why Is Trump So Eager for a Rate Cut? (Subscribers only)

Let’s be clear: this isn’t about inflation. This is about the election.

Trump’s rate cut push has three goals—none of them economic:

1. Stage a short-term market boom.
   A cut makes stocks jump, real estate rise, and people feel richer. It’s economic theater—perfect for campaign ads.

2. Cover up the pain of his tariffs.
   Personal income just fell 0.4%. Consumer spending is shrinking. It’s a direct hit from tariff policy—and a rate cut would hide the symptoms just long enough to escape political blame.

3. Return to his old game: bullying the Fed.
   During his presidency, Trump regularly attacked the Fed—accusing them of being “too tight.” Now he’s trying again, knowing a compliant Fed gives him a campaign edge and media win.

But this playbook comes at a price:
It risks the Fed’s independence, weakens investor trust in U.S. policy, and turns monetary decisions into political weapons.

👉 [Subscribe to keep reading: What happens if the Fed gives in—and how this could backfire on the entire U.S. economy.]