Uncertain whether economic policies can win the election, Trump questions, "Now there is good news and the stock market is down, when the news is particularly good the stock market will crash," it's all the Federal Reserve's fault!

Former President Donald Trump expressed uncertainty about whether his economic policies could help the Republican Party win in next year's midterm elections, while attributing the stock market's negative reaction to positive economic news to the Federal Reserve.

In an exclusive interview with Trump in the Oval Office last Friday, as reported by The Wall Street Journal, although Trump boasted about having "created the greatest economy in history" and emphasized that significant funds are flowing into the U.S. for projects like auto factories and artificial intelligence, he acknowledged that the full effects of these economic activities may not be seen until the second quarter of next year.

When asked if the Republican Party would lose the House of Representatives in the November midterm elections, Trump candidly said: "I can't tell you. I don't know when all this money will really take effect."

This uncertainty reflects the gap between economic data and voter sentiment. Since Trump took office, although the U.S. economy has been expanding, job growth has been slow, the unemployment rate has risen, and prices for many everyday goods and services have increased, leading many Americans to not feel the actual benefits of macro growth.

However, Trump stated: "I think by the time we need to discuss the election, which is a few months from now, our prices will be in good shape."

Targeting the Federal Reserve

Trump devoted a significant portion of the interview to expressing his dissatisfaction with the Federal Reserve. He believes that financial markets have become accustomed to worrying that whenever economic activity or employment data exceeds expectations, the Federal Reserve will become more hawkish to combat inflation. This "good news is bad news" market logic frustrates him.

"In the past, when there was good news, the market would go up... Now, when there is good news, the market goes down. If the news is particularly good, the market crashes."

In the interview, Trump questioned the current logic of financial market reactions and attributed this phenomenon to market concerns over the Federal Reserve's hawkish stance.

He made it clear: "I will not allow anyone who thinks that good news means you automatically have to raise interest rates to the ceiling to choke off inflation into the Federal Reserve." This statement directly challenges the central bank's data-driven decision-making tradition.

He has a strong desire for low interest rates, with a target of 1% that sharply contrasts with the Federal Reserve's current stance, suggesting that if economic data remains strong, the divergence between the White House and the Federal Reserve on interest rate paths may widen.

Continuing to Wield Tariffs

On the policy front, Trump reiterated his reliance on tariffs, calling them a "windfall" for the U.S. and giving him leverage in international negotiations. However, Trump's tariff policy is facing a ruling from the Supreme Court, and he stated that if the court rules his tariffs illegal, "it would be a terrible thing for America."

At the same time, Trump defended the government's direct intervention in the economy. He confirmed that the government is considering taking stakes in defense companies and has already invested in semiconductor and critical mineral companies. He stated: "I think we should take stakes in those companies that people need help with. Now, some people might say that sounds un-American. In fact, I think it's very American." This industrial policy approach could have profound implications for investors in related industries and market structures

Persistent Inflation

Inflation is one of the core challenges facing Trump. He blames high inflation on the previous administration and insists that he has lowered prices.

However, during his second term, the prices of everyday essentials such as coffee and beef have risen significantly. Democrats have also seized on this to attack, with Suzan DelBene, chair of the House Democratic Campaign Committee and a Washington state representative, stating, "The president's economic policies are in effect, and they have increased costs for families across the country."