Source: Washington Post
by Lael Brainard
“President Donald Trump has said the quiet part out loud. His threats to terminate Federal Reserve Chair Jerome H. Powell if Powell doesn’t cut interest rates are motivated by one simple desire: to make it cheaper for the administration to add about $4 trillion to the federal debt. … In a public event promoting the $4 trillion Republican budget bill, he spelled out his wishes even more clearly: ‘We have to work hard with cuts on that. And this guy could do it so easily. … But every point is … $300 billion. So if we got it down to 1 percent we’re talking about almost a trillion dollars in saving just with a stroke of a pen.’ … There you have it: The Fed should just cut rates to 1 percent (a cut of more than 3 percentage points) to reduce the debt-service costs on the trillions added to the national debt by the GOP mega-law.” (07/09/25)