re: Trump tells Fed to cut rates or he'll end trade with countries who have a trade surplus

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It’s almost as if some people have never heard of the term bully pulpit.

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Trump: We could do tremendous good for ourselves by just not trading with countries.. We lose with Mexico $195 billion a year. They have nothing that we have to have, I mean. Hot tamales, tomatoes, a couple of things

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as I was saying, galactic stupidity

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. This is beyond dumb.

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Everyone knows we can not grow our way out of 40 trillion in debt.
Everyone knows congress will never stop spending borrowed money.

If inflation is not the solution, what do you suggest?

Since Scott would do it much better than I would, I asked ChatGPT to pretend to be Scott Adams and give us what his analysis might be given his published works and prior political commentary.

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Everyone is analyzing Trump's post like it's an economics paper.

Wrong filter.

Trump starts at the extreme, creates the anchor, and makes everyone argue inside his frame.

Yesterday: Should the Fed raise rates?

Today: Should rates be lower, can Trump pressure the Fed, and what leverage does he have?

That doesn't mean the literal threat is good policy or that he'll carry it out.

The real question is whether it moves anyone.

If the Fed holds instead of hikes, Trump claims movement. If rates later fall, he claims a win.

The only real problem is credibility.

So don't ask, "Would he really stop trading with Mexico?"

Ask, "Did he move the frame, or make a threat nobody believes?"

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Need to raise rates

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The question is did he move the frame?

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There is no frame to move. The Fed is not lowering rates in the near future and if inflation numbers come in hot this month they'll have little choice but to hike rates.

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Everything points to the need to raise rates...

So he is pulling out the stops to keep it from happening

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I have to wonder if this isn't just a positioning statement. He's smart enough to know how rates and inflation work so he also has to know there is little chance they get lowered.

If the economy continues to putter along he can couch it as "we would be doing better if they lowered rates." If the economy starts losing steam he can respond with "we would be better if they would listen to me and lower rates." If the economy improves, he can stance it as "and this was with high rates, imagine how much better we would be doing if they would listen to me and lower rates."

It's a rhetorical no-lose scenario.

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There is no frame to move.

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There is always a frame to move.

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The long term effects of AI et al is dis inflationary

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Sort of. There's still the problem of too much money in the economy. Mass producing things of value can lower the value of that item or items, but the impact of too much currency just concentrates the inflationary pressures into other areas.

But before we even get to that point, we have to define what "long term" means. Is it 5 years? 10? 69 ? After that, we still have to deal with what happens in the interim. It's great if AI and robotics end up creating a post-scarcity society (well, great in some aspects but that's a different topic) but we are nowhere even close to that and there are a LOT of hurdles to deal with before we get there and the first is the current sticky inflation and the runaway spending causing it.

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also the long term effects on gasoline prices from the Venezuela and Iran conflicts will be dramatically lower fuel prices in the USA..which is disinflationary.

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Agreed, but what about until then? Trump seems to be dragging his feet on doing the necessary (full-scale invasion) to bring Iran to heel and estimates are that Venezuela's contributions won't have an impact for at least the next 3-5 years.

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Inflation is coming down long term.

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We're agreed on that, but it won't happen if we don't focus on what's happening now. We're pretty much a minor black swan event from a massive economic drop because we never really dealt with the fallout of the GFC and then have just fueled it since COVID.

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Stop believing the propaganda from the deep state media left wing devils whose only goal is to destroy this country.

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You've obviously not read much of what I've posted on the various forums here. It's understandable as there are so many posters and so many boards, but I'll TL;DR it for you by saying you couldn't possibly be more wrong.