You can have very low interest rates, and you can have debt-driven inflation. You just can’t have both at the same time. That is the reality President Trump refuses to recognize.
At the core of the president’s half-baked plan to resuscitate the economy is a return to the good old days of near-zero interest rates.
The Federal Reserve can set the short-term rates as low as it wants, but the bond markets will continue to rebel and reflect reality.
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“We should have the lowest interest rates anywhere in the world,” Trump said last week in response to a reporter’s question in the Oval Office.
“In the old days … if we announced good numbers, interest rates went down. Now, if you announce good numbers, interest rates go up
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