Trump’s Economic Blueprint Risks Inflation Storm Before Midterms

Americans rejected President Joe Biden and the Democrats in last year’s election due to their dissatisfaction with the economy. Today, they remain dissatisfied with Donald Trump’s economic management. With inflation still the top voter concern — a position it held last year — Trump’s team has shifted focus to “affordability” as a potential winning theme for Republicans in next November’s congressional midterms.

However, an AP/NORC poll released last week shows 67% of Americans view the president’s handling of the economy negatively. In a December 8 interview with Politico’s Dasha Burns, Trump claimed he would give himself an “A-plus” grade on the economy — later elevating it to “A-plus-plus-plus-plus-plus.”

The administration believes Americans will soon accept Trump’s economic perspective ahead of the midterms. U.S. Treasury Secretary Scott Bessent assures colleagues and his boss that by April 15, when taxpayers see the impact of Trump’s recent tax cuts, everyone will feel economically better.

Trump’s proposed solution for a high-growth economy next year involves Federal Reserve rate cuts. He stated to the Wall Street Journal last week he wants “the lowest rate in the world” — specifically “1% and maybe lower than that.”

Early next year, Trump plans to appoint a new Fed chairman. One candidate, Kevin Warsh, has been praised by Trump for his stance on rate cuts.

Lower interest rates would provide easy credit for businesses and individuals to fund improvements, new ventures, or spending. However, this approach risks accelerating inflation, which could negate the benefits of Trump’s tax cuts.

A Harvard/Harris poll last week found 57% of voters believe Trump is losing the fight against inflation — an improvement from last month (when 60%) said the same), but still a warning for the administration.

If Trump misjudges inflation, his economic gains will not save the GOP in November or even in 2028. While Trump’s overall approval ratings remain in the low 40s — comparable to Barack Obama and George W. Bush at this stage of their second terms — neither Obama nor Bush were succeeded by a party member.

Trump is betting on artificial intelligence to drive an economic boom similar to Bill Clinton’s telecom revolution. However, only 10% of Americans are more excited than concerned about AI in daily life — while 50% express greater concern than excitement.