Newman: Trump’s biggest economic vulnerability has emerged

Published On Feb 14, 2025, 8:01 AM

Donald Trump, now in his second presidential term, faces significant economic challenges due to rising interest rates, despite his calls for them to be lowered. High long-term interest rates, which affect consumer loans like mortgages, are seen by markets as a reaction to persistently high inflation expectations. Trump’s emphasis on tariffs may exacerbate inflation, and while the Federal Reserve controls short-term rates, long-term rates are determined by market conditions. Some analysts warn that continued conflict in trade could pressure Treasury rates higher, impacting borrowing costs across the economy, potentially leading to a credit crunch.