Wall Street Journal Slams Trump’s Interest Rate Demand, Questions His Economic Understanding

News
Alexis N. Crockett
February 13, 2025
0
71
8 minutes read

President-elect Donald Trump takes the stage before he speaks at the FOX Nation Patriot Awards on Dec. 5 in Greenvale, N.Y. (Heather Khalifa/AP)

Former President Donald Trump’s call for interest rate cuts has left The Wall Street Journal’s conservative editorial board questioning his understanding of economics. In a scathing opinion piece published Wednesday, the board dissected Trump’s latest economic demands, warning that his policies could backfire.

Trump took to his Truth Social platform earlier this week to push for lower interest rates, arguing that they “would go hand in hand with upcoming Tariffs!!!” The Journal’s editors, however, were quick to point out the flaws in that logic.

“The layers of intellectual confusion here are hard to parse, especially since higher tariffs will mean higher prices on the affected goods,” the editorial board wrote. “But perhaps the president wants the public to look elsewhere when assigning blame for rising prices.”

The board expressed concerns that Trump’s economic approach—often dubbed “Trumponomics”—fails to recognize the fundamental relationship between inflation, tariffs, and monetary policy. His push for lower interest rates, combined with increased tariffs, could lead to higher consumer prices, they warned.

“Does President Trump understand money?” the editorial questioned. “Not money as in cash, but the supply of money, the price of money as measured by interest rates, and their impact on inflation? The answer would appear to be no.”

The editors noted that Trump, as a real estate investor, has historically favored “easy money” policies—low interest rates and a weaker dollar. While this strategy may benefit the real estate sector, they cautioned that, on a national scale, it could have damaging consequences.

“In the real world, that combination could ultimately lead to higher prices,” the board explained, suggesting that such a scenario could also hurt Trump politically. “As a political matter, an inflation revival may be the biggest threat to the Trump Presidency,” they wrote.

“Mr. Trump was elected as voters reacted to inflation and falling real incomes under Joe Biden. Real average earnings are flat over the last three months as inflation has bounced up.” The editorial board concluded with a stark warning: if inflation persists, Trump’s popularity could take a major hit.

“If this persists, Mr. Trump won’t have a 53% job approval rating for long.” As Trump continues to shape his economic message ahead of the next election, the Wall Street Journal’s sharp critique highlights growing concerns among conservative economists about the potential risks of his policies.