U.S. President Donald Trump is pushing for interest rate cuts after the U.S. economy’s third-quarter GDP growth surpassed market expectations, hitting 4.3%.
In a post on Truth Social on Tuesday, Trump declared to change the abnormal market structure where stock prices fall on good economic news. He characterized the current situation, where fears of interest rate hikes are dampening stock market rallies during strong economic growth, as a structure that undermines America’s potential.
Trump hailed the recently announced GDP figures as an achievement despite the “downward pressure from the Democratic shutdown.” However, he criticized the financial markets’ lackluster response, stating, “Wall Street’s ‘heads’ are wired differently than they used to be”
He argued, “In the old days, when there was good news, the Market went up. Nowadays, when there is good news, the Market goes down, because everybody thinks that Interest Rates will be immediately lifted to take care of ‘potential’ Inflation.” He warned that this logic is causing the U.S. to lose the ability to have the “Great Market” it experienced during its industrialization and growth phases.
Trump repeatedly emphasized that robust growth and rising stock prices do not cause inflation. He asserted, “Strong Markets, even phenomenal Markets, don’t cause Inflation, stupidity does.”
Trump also laid out explicit criteria for the next Federal Reserve Chair. “I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever,” he said. He insisted on restoring a market “that goes up on good news, and down on bad news, the way it should be, and the way it was.”
On inflation response, Trump advocated for a reactive approach, asserting, “Inflation will take care of itself and, if it doesn’t, we can always raise Rates at the appropriate time.”
Trump continued his criticism of the Federal Reserve and economic elites. He argued, “A Nation can never be Economically GREAT if ‘eggheads’ are allowed to do everything within their power to destroy the upward slope,” and added, “We are going to be encouraging the Good Market to get better, rather than make it impossible for it to do so.”
