Updated
Updated · Quartz · Sep 1
Trump Urges Fed Cuts, Says US GDP Could Reach 20%
Updated
Updated · Quartz · Sep 1

Trump Urges Fed Cuts, Says US GDP Could Reach 20%

3 articles · Updated · Quartz · Sep 1

Summary

  • Trump said the U.S. economy could grow 14% to 20% and argued the Federal Reserve should cut rates rather than raise them if growth accelerates.
  • The claim clashes with current data: real GDP grew at a 1.5% annualized rate in Q2, down from 2.1% in Q1, while core PCE inflation ran at 3.6% and headline PCE at 5.3%.
  • Fed policy is moving the other way. The central bank held rates at 3.5% to 3.75% in July, and Wall Street broadly expects a September hike after three officials dissented in favor of an increase.
  • History also undercuts Trump's growth target: since 1947, only one quarter has topped 20% annualized real GDP growth — Q3 2020's 34.9% rebound after the Covid shutdown collapse.

Insights

With GDP slowing and inflation stubbornly high, will the Federal Reserve risk a rate hike or pivot to support growth?
Can the US economy truly achieve unprecedented double-digit growth without sparking massive inflation?
How do massive AI investments and global supply shocks complicate the traditional rules of inflation and interest rates?