Investing.com – Members of President-elect Donald Trump's economic team are said to be discussing a plan to gradually raise rates, according to a report from Bloomberg, citing people familiar with the matter. This approach aims to strengthen negotiations and prevent rapid increases in inflation. The proposal is in its early stages and has not yet been presented to Trump.
This plan includes a graduated rate schedule, which will increase approximately 2% to 5% each month. The proposed rate hike will be implemented under the authority of the International Emergency Economic Powers Act.
The team working on this plan includes Scott Bessent, nominated by the Treasury Secretary, Kevin Hassett, who has been appointed to be the director of the National Economic Council, and Stephen Miran, who has been nominated to lead the Council of Economic Advisers. The sources asked not to be identified because of the internal nature of the discussions.
During the 2024 presidential campaign, Trump proposed tariffs of at least 10% to 20% on all imported goods, and 60% or more on goods from China. Since his election victory in November, there have been many reports about how he intends to implement taxes. However, Trump has dismissed one report of a limited release as false.
5 fell below its November level, just before Trump's election, last Monday, but later rebounded. Investors have sold Treasuries on fears that inflation will continue, in part because of new taxes, creating a challenging environment for stocks and the broader economy.
With Inauguration Day just a week away, economists can only speculate about how Trump's trade wars will affect the economy. The Managing Director of the International Monetary Fund, Kristalina Georgieva, said that tax threats are already causing long-term borrowing costs to rise around the world. Uncertainty surrounding the administration's trade policies is contributing to global economic stress.
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