The ¯\_(ツ)_/¯ economy
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What recent comments did Trump make about affordability?
President Trump has taken flak recently for not appearing to get that Americans think life is too expensive. At a rally in Pennsylvania on Tuesday that was supposed to be about the economy, he made fun of Joe Biden.
What state? What state is it? It's Pennsylvania.
Oh. He ranted about immigration. He reminisced. He returned to old chestnuts.
You don't need $37 for your daughter. Two or three is nice.
But he offered little in the way of acknowledgement. They say... Affordability.
And everyone says, oh, that must mean Trump has high prices. No, our prices are coming down tremendously.
When he's not denying the problem, Trump is often pinning the blame on his favorite target, the Federal Reserve, for not cutting interest rates. Trump has always dismissed technocrats. In his second term, he's relying more on instincts than experts. And it is starting to damage his presidency. That's coming up on Today Explained.
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How is Trump pressuring the Federal Reserve regarding interest rates?
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Today Explained. Today Explained. Today Explained.
I'm Neil Irwin. I'm the chief economic correspondent at Axios.
Yesterday, before the Fed made its decision on interest rates, it seemed like a lot of people were watching very carefully, including people who are not normally interested in, particularly interested in what the Fed does. What were the stakes yesterday?
question has been, how much do you cut interest rates? You know, the Fed, when inflation was roaring, they raised interest rates a lot, up to almost 5.5%. And then they've been kind of steadily bringing them back down. And what we have is this moment where there's still high inflation, there's tariffs coming through the system, the economy looks a little shaky, the job market looks a little shaky. The president is hammering the Fed every other day to cut rates, cut rates, cut rates. And the challenge for Jay Powell and the Federal Reserve is, do we do it? Do we do a third interest rate cut this year? And does that give consumers and businesses some relief from these high interest rates of the last few years?
All right. So tell me what the Fed did yesterday and why you think they did it. Good afternoon.
My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people.
So they lowered their target interest rate. This is kind of the baseline interest rate that affects rates across the economy by a quarter percentage point. That was the third quarter point cut this year. They did another percentage point of cuts last year. So, you know, all in all, we're down one and three quarters percent from where things were back during the great inflation. And, you know, what they did is the reason they did it is because they see some evidence that the job market is starting to crack a little bit.
I think you can say that the labor market has continued to cool gradually, maybe just a touch more gradually than we thought.
And they think that even to the degree inflation is a problem, it's a temporary problem.
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Chapters
5 chapters
1
What recent comments did Trump make about affordability?
0:00–2:02
2
How is Trump pressuring the Federal Reserve regarding interest rates?
2:02–10:08
3
What were the stakes of the recent Federal Reserve meeting?
10:08–15:34
4
What decision did the Federal Reserve make about interest rates?
15:34–21:41
5
Who are the dissenters in the Federal Reserve's recent decision?
21:41–24:52