Wall Street Journal: 'Does President Trump Understand Money?'

"Does President Trump understand money?" the Wall Street Journal asked in an editorial.

The conservative newspaper's editorial board pointed to a Truth Social posting the president made after the Consumer Price Index rose to a higher-than-expected 0.5% in January, bringing the inflation rate up to 3%.

"Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!" the president posted on his social media site.

Trump's reaction led the Wall Street Journal to question the president's financial acumen.

"Does President Trump understand money? Not money as in cash, but the supply of money, the price of money as measured by interest rates, and their impact on inflation?" the editorial asked.

"The answer would appear to be no after Mr. Trump called for lower interest rates on Wednesday — the same day the Labor Department reported an increase in inflation for the third straight month," it added.

It went on to say that if Trump is trying to blame the Federal Reserve, which sets short-term interest rates, he "has the analysis backward."

"Rising inflation means the Fed must be more cautious in cutting rates. This is how financial markets read the news that the consumer-price index (CPI) rose 0.5% in January," the Wall Street Journal said in the opinion piece.

"Long bond rates rose sharply, with the 10-year Treasury note popping to 4.63% from 4.53%. This reflects market worry over inflation," it said.

The newspaper said Trump isn't responsible for the increase, laying blame instead on the Fed for its " premature interest-rate cut of 50 basis points in September. Long bond rates shot up immediately and have stayed higher, but the Fed still cut another 25 points in November."

Fed chairman and Trump interest rates

But the editorial said Fed Chair Jerome Powell appears to grasp the seriousness of that mistake, because he has said he's in no hurry to cut rates further.

The Fed will likely ignore the president, as "well it should," the paper said.

It said a return to high inflation could post the "biggest threat" to Trump's presidency.

"Mr. Trump was elected as voters reacted to inflation and falling real incomes under Joe Biden. Real average earnings are flat over the last three months as inflation has bounced up. If this persists, Mr. Trump won't have a 53% job approval rating for long," the editorial said.