Donald Trump emphasizes the need for lower interest rates, yet a deeper issue lies within the high debt and deficits in the U.S. economy.
Trump's Economic Policy and Interest Rates
Throughout his political career, Trump aimed for lower interest rates. Despite his criticism of Fed Chair Jerome Powell, the real issue is the high debt load and deficits in the American economy.
Global Economic Changes: Deficits and Debt Load
Against the backdrop of high interest rates, reaching 7% on mortgages, the global pool of savings is shrinking. With Baby Boomers retiring and China reducing its investments in U.S. debt, demand for Treasury bonds is falling, linked to shifts in global economic behaviors.
Future of Interest Rates and Economic Impact
Analysts suggest interest rates are likely to remain around 4.5% or higher in the near future, despite potential leadership changes at the Fed. With rising government debts and investments in various global projects, the prospects for rate cuts appear very challenging.
The current economic situation in the U.S. highlights that merely changing the leadership at the Fed will not resolve deeper issues related to debt load and global economic changes.
