The president says that if the Fed lowered short term rates, interest expenses for the U.S. would fall by $1 trillion per year. The U.S. spent $1.1 trillion on interest expenses in 2024, and so there's almost no way this claim is remotely true.

Interest expense in 2020 was around $517 billion, and this was a year in which interest rates across the curve were very, very low helped in part by massive Fed purchases of US Treasuries. So even if you were able to somehow get a very, very low Treasury curve ... it doesn't pencil out.

Stipulating that it is entirely reasonable for people to change their view, about 10 months ago, you thought that dovish-oriented policy-makers (or commentators) were mistaken in their risk-management reaction function; that economic weakness brought about by a high policy rate could be "easily and swiftly reversed" and that this was a "small price to pay for a permanent reduction in inflation." You wrote with alarm about cavalierly assuming 3% inflation was good enough for government work. Have your views about these risks changed? Policy rates are now 100 bps lower than they were when you wrote this.

The way he's talked about this recently is to say that every 1 pp reduction in interest rates saves $360 billion in federal interest expense. I don't think he's talking about private sector borrowing there. (1 point reduction in interest on $36 trillion in debt gets you $360 billion). Here's from last week to reporters traveling with him: "He's always too late. Every point costs us $360 billion. Think of that. And we should be three points [lower in rates.] That's almost a trillion dollars, approximately a trillion dollars less we should be just with the signing of a piece of paper. So, we'll see what happens." And here's from a few days before that on Truth Social:

@Bassam_A_Noor

@SantiagoAuFund

@____sth____