Pres. Trump outside the Federal Reserve: We should have lowest interest rate of any country

Key Concepts

• Interest Rates: The cost of borrowing money, impacting housing affordability and economic growth.
• Tariffs: Taxes on imported goods, used to generate revenue and influence trade.
• Federal Reserve (The Fed): The central banking system of the United States, responsible for monetary policy, including setting interest rates.
• Inflation: A general increase in prices and fall in the purchasing value of money.
• Economic Growth: An increase in the production of goods and services in an economy.
• Housing Affordability: The ability of individuals and families to afford housing.
• Federal Reserve Building Overrun: Cost overruns associated with the construction or renovation of the Federal Reserve building.

Trump Hotel Success and the Fed Building Project

The president begins by referencing the successful renovation of the Old Post Office into the Trump Hotel, later sold to Waldorf Astoria. He contrasts this with the ongoing Federal Reserve building project, which he views as mismanaged and overly expensive. He notes that the Trump Hotel project was completed quickly and inexpensively for around $200 million.

Interest Rates and the Economy

The president emphasizes the importance of lowering interest rates to improve housing affordability. He argues that the U.S. economy is currently "the hottest in the world," but high interest rates are preventing people from buying homes. He states that low inflation and high cash flow, partly due to tariffs, support the argument for lower rates. He claims that Japan is paying the U.S. $550 billion as part of a deal that also involves opening up their economy. He asserts that every percentage point reduction in interest rates would save the country $365 billion.

Tim Scott's Perspective

Senator Tim Scott echoes the president's sentiments, stating that Americans deserve to become first-time homebuyers and that lower interest rates would further improve the economy. He notes that full employment is more possible and wages rise faster when interest rates are lower. He also highlights record-breaking revenue coming into the country.

Critique of the Fed Building Project

The president and Senator Scott toured the Federal Reserve building project. The president criticizes the project's cost overruns and specific design choices, such as building a basement (which he describes as the "worst space" and "most expensive space to build") and excessive protection measures. He mentions the need for a "reverse bathtub" construction to keep water out of the basement, adding to the expense. He contrasts the Fed building project with his own experience building the Trump Hotel, which he claims was a much larger project completed for $200 million with high-end finishes.

International Comparisons and Trade Deals

The president points out that Europe has lowered interest rates 11 times recently, while the U.S. has not. He mentions ongoing trade deals with Europe, Indonesia, and the Philippines, emphasizing that "money is pouring in." He also discusses a deal with Japan, where they paid $550 billion upfront and agreed to open their economy. He suggests that other countries could "buy down" their tariffs as well.

Relationship with Jerome Powell and the Fed

The president describes his conversation with the Federal Reserve Chairman as productive and without tension. He expresses his belief that the chairman will "do the right thing" and lower interest rates. He mentions having potential replacements in mind for the chairman but does not disclose names.

Senator Scott's Perspective on the Fed

Senator Scott states that he had an "honest, candid conversation" about the overruns at the Federal Reserve building. He emphasizes the importance of focusing on interest rates and first-time homebuyers rather than the building's cost overruns.

Declassified Documents and Obama Administration

The president briefly mentions newly declassified documents and their connection to President Obama and his administration.

Conclusion

The president and Senator Scott advocate for lower interest rates to improve housing affordability and further stimulate the U.S. economy. They criticize the cost overruns and mismanagement of the Federal Reserve building project, contrasting it with the successful Trump Hotel renovation. The president expresses confidence that the Federal Reserve Chairman will eventually lower interest rates and highlights the positive state of the U.S. economy compared to other countries.