Trump: May escalate strikes against Iran after midterm elections; Fed's continued interest rate hikes are "very bad".
US President Trump indicated that the US might escalate military action against Iran after the November midterm elections. He also expressed dissatisfaction with the Federal Reserve's continued interest rate hikes.
Trump revealed this information in a media interview on Thursday. In this conflict, now in its eighth month, the US government is struggling to find a way out. Trump rejected a recent Iranian proposal aimed at extracting concessions from the US, noting that escalating bombing after the election is "possible."
Regarding monetary policy, Trump explicitly stated that the Federal Reserve's continued interest rate hikes were "very bad." While he defended Federal Reserve Chairman Warsh, he blamed rising borrowing costs on Federal Reserve officials appointed by the previous administration and reiterated that the United States should have some of the lowest interest rates in the world.
These statements directly address core economic issues affecting voters and investors. American household budgets are under pressure due to rising energy prices caused by the war, and Trump has also pointed out that current interest rate hikes are more a reflection of concerns about inflation than a sign of a strong US economy.
Military action against Iraq may escalate after the election.
With the November midterm elections approaching, Trump's Republican Party is facing a tough challenge in maintaining control of Congress.
In recent weeks, Trump has indicated that he believes Iran is employing delaying tactics in diplomatic negotiations, aiming to wait and see the election results. The US president reportedly previously rejected an Iranian proposal that suggested reopening the Strait of Hormuz in exchange for the US ending its blockade of Iranian ports or easing oil sanctions.
When pressed in the interview about which targets would be targeted if bombing resumed, Trump declined to provide details. He also downplayed concerns about U.S. munitions reserves, stating that the U.S. possesses a “large arsenal,” including lower-level weapons. He emphasized that the U.S. possesses powerful intermediate and advanced-level munitions, more potent than ever before.
Criticism of the Fed's interest rate hike path
In assessing the domestic macroeconomic environment, Trump pointed the finger at the Federal Reserve's tightening cycle.
In an interview, he expressed his dissatisfaction with the Federal Reserve's continued interest rate hikes, but clarified that he "does not blame Kevin," referring to the current Federal Reserve Chairman, Warsh.
Trump believes that the push for interest rate hikes is driven by Federal Reserve members appointed by previous administrations. He expressed his view to the media on the current economic data feedback mechanism, pointing out that the "good" economic data appearing nowadays is actually leading to higher borrowing costs.
In an interview, Trump offered his insights on inflation and debt. He stated that higher interest rates were due to concerns about inflation, rather than reflecting the actual strength of the U.S. economy. He added, "A certain level of inflation will also pay off that debt very quickly."
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