President Donald Trump said the United States should have the lowest interest rates in the world regardless of what the economic data says, unveiling a streamlined monetary-policy framework in which numbers may continue to be collected for archival purposes.
The comments came just days before a Federal Reserve meeting at which policymakers are expected to raise rates, following renewed inflation pressures that economists had previously considered relevant.
Under Trump’s proposed system, however, the Fed could eliminate several redundant departments devoted to employment, inflation, wages, growth, credit conditions and other statistics that merely complicate the more important question of whether borrowing money feels sufficiently cheap.
“The data has had a very good run,” said one White House economic adviser. “But at some point you have to stop letting inflation dictate monetary policy.”
Trump has repeatedly argued that America should enjoy lower borrowing costs than other countries, effectively reframing interest rates as another international competition the United States should win, alongside GDP, manufacturing and Olympic medal counts.
Fed officials have not adopted the new methodology, which analysts described as “price stability, except cheaper.”
Markets are now awaiting Wednesday’s decision, when the central bank must choose between responding to inflation or demonstrating the confidence necessary to ignore it.
Economists stressed that either approach can lower inflation eventually, although one requires higher rates and the other requires redefining inflation as somebody else’s problem.
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