Trump blames 'stupidity' for inflation and warns of trade restrictions

President Donald Trump told reporters in the Oval Office that "success does not cause inflation; stupidity causes inflation," calling the recent market dip on inflation worries "crazy." He also warned that the United States could stop trading with foreign countries if interest rates on government debt continue to rise, a stance he posted on social media.

The comments came as August added 162,000 jobs, a figure Trump said contradicted the notion that hiring boosts inflation. He reiterated at a North Carolina rally that a victory in the upcoming election would launch a "brand new Trump economic boom," despite the economy growing at about 2% annually, slower than recent gains under the previous administration.

Economists noted that the administration’s credibility on growth, inflation, and fiscal matters has weakened. Joe Brusuelas, chief economist at RSM US, said the administration’s predictions are out of step with economic reality. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been promoting growth benefits at recent G20 meetings, while also working on plans to reduce the national debt and deficit.

White House Council of Economic Advisers chairman Christopher Phelan said the administration expects higher growth, citing artificial-intelligence advances, tariffs intended to boost domestic manufacturing, and tax cuts as drivers. However, analysts warned that even sustained 3% annual growth would only stabilize the current debt level, and that relying on optimistic growth scenarios could be risky.

Polls show the president’s approval rating on the economy at 32%, down from 50% in 2018. Critics argue that higher interest rates and a $40 trillion debt burden, compounded by recent tariff disputes with Canada, could further erode economic confidence.