Trump's Economic Gamble: The Quest for Cheaper Credit

U.S. President Donald Trump is aggressively pursuing lower credit costs to boost GDP growth but faces resistance from the Federal Reserve. His administration is attempting to cap credit card rates and purchase mortgage bonds, raising concerns over long-term economic policy integrity and Fed independence.

U.S. President Donald Trump is on a mission to decrease credit costs, a move that could further increase the GDP growth rate, already exceeding 4%, but also risk overheating the economy. Key strategies include capping credit card rates and ordering massive mortgage bond purchases, drawing criticism for potentially diminishing Federal Reserve independence.

Despite the Federal Reserve's reluctance to cut interest rates swiftly, Trump aims to use regulatory and financial levers to ease credit conditions. However, experts warn these tactics might backfire, particularly by restricting access for lower-rated borrowers. As the midterm elections approach, the political stakes are high.

The broader controversy lies in the potential erosion of the Fed's autonomy, amid concerns about maintaining inflation targets. While short-term gains in credit accessibility may be realized, long-term financial stability could be compromised, sparking debates about the future direction of U.S. monetary policy.