Posted on 10/02/2026 9:19:02 AM PDT by wafflehouse
President Donald Trump said “certain levels of inflation” can reduce the burden of the national debt “very rapidly,” putting a long-running bond-market concern into unusually direct language.
The remarks came in a TIME interview conducted Monday and published Thursday, and were reported by the Wall Street Journal’s Nick Timiraos. Trump also said Federal Reserve interest-rate policy is hurting the economy more than inflation and blamed high rates for making it harder to reduce federal deficits.
“Certain levels of inflation will also pay off that debt very rapidly. Very rapidly.”
Pressed on how Washington could bring down the debt burden, Trump added:
“I don’t want to tell you what those means are, but you can pay off the debt through other means.”
For bondholders, the issue is straightforward. Higher inflation reduces the real value of fixed-rate debt if yields do not rise enough to compensate, effectively shifting part of the burden away from the borrower and onto holders of long-duration government bonds.
Trump also criticized the Fed’s rate-setting committee after its unanimous decision last month to raise rates to fight persistent inflation. He called the board “very hostile” while largely sparing Chairman Kevin Warsh, whom he said was constrained by other members of the committee.
“Trump also said Federal Reserve interest-rate policy is hurting the economy more than inflation and blamed high rates for making it harder to reduce federal deficits.”
Context is everything.
Love Trump, still prefer him to the ones I didn't vote for, but please no.
Cosider the source.
Screw the source. Did he say it or didn’t’ he say it? Because if he said it, my god, what a horrible take. And going into the midterms…………….
He's criticizing the Federal Reserve for its interest rate policy, but the Federal Funds Rate has no bearing on the U.S. Treasury rates that drive the entire U.S. debt market. The Fed could cut its own rate to 0% tomorrow, and that will do nothing to drive down U.S. Treasury rates.
Federal government bond rates are driven by investor confidence in the solvency of the U.S. government and the fiscal responsibility of Congress and the administration. And right now investor confidence in our government is in the toilet.
Balancing the budget should not be viewed as a goal in of itself. The budget could be balanced at current spending with a 70% tax rate (Of course spending would still go up). The real problem is overspending. Federal spending should be cut down to actual Constitutionally mandated measures. Bring back federal responsibilities and spending to pre-FDR levels.
He’s not wrong. After World War II our debt to GDP ratio was over 108%. Today our debt/GDP ratio is 101%
Click here for details on how we cut the debt then.
https://www.perplexity.ai/search/9f16ef84-ffed-4174-8a09-c8ff36788439
This was always the only option. The debt has been allowed to grow too big to deal with any other way, other than the nuclear option, default. And I honestly am terrified of the consequences, both known and unintended of the default option. Inflation is the least painful, and dangerous, in the short-term for polticians.
The question is, can they ride the knife edge or are we doomed to spin up into hyper-inflation.
bfl
Your assumption is that once you nominate a satisfactory Republican, he will get more than 35% of the vote.
This theory is being tested in Texas and elsewhere on November 3.
Don't count your chickens.
Inflation is just regressive taxes. The richest are protected by increasing asset prices that exceed their higher consumption costs. The vast majority of the population doesn’t have a huge asset collection, they just endure higher consumption costs.
doesnt much matter. both sides are stealing from me and no one seems to care about it
So you’re gonna pull a bonehead move by not voting???
What a dumbass move. I’m pissed off too, but enabling the ‘RATS, which is what you rre doing.
has anyone ever managed to ‘ride the knife edge’?
doesnt much matter. both sides are stealing from me and no one seems to care about it
Inflation can shrink our debt, but in doing so, it will shrink the value of our life savings and standard of living.
I’m old enough to remember when conservatives were anti-debt and anti-inflation.
Well he’s right it does work. Its called stealth default. You’re paying off old dollars with devalued dollars.
Its does put a pinch on the consumer though.
JUST SHUT UP TRUMP
I recall some speculation that a 2 to 2.5% annual inflation was desirable.
Also, I’m certain that his words here were taken out of context. Just like when they said that he advised drinking bleach. The media invents the news, and the sheeple gobble it up.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.