Trump’s Economic Mirage: The Inflation Threat to His ‘A-Plus’ Promise

By Daniel McCarthy
Tuesday, December 16, 2025

The two presidents could hardly be more different in most ways — but in the one that counts most with voters, Trump is in danger of resembling his predecessor.

Americans rejected Biden and the Democrats last year because they were incensed at the lousy state of the economy. Right now, they’re not much happier with Trump’s economy.

Inflation was the No. 1 concern on voters’ minds last year, and it remains a top concern today.

Trump’s team plans to tout “affordability” as a theme for Republicans to win in next November’s congressional midterms. However, if the election were held today, that pitch would not sell: An AP/NORC poll released last week found 67% of Americans view the president’s handling of the economy negatively.

In a recent interview, Trump stated he would give himself an “A-plus” grade on economic management — and when questioned about it, he raised it to “A-plus-plus-plus-plus-plus.”

The administration believes Americans will come around to its perspective on the economy ahead of the midterms. U.S. Treasury Secretary Scott Bessent reassures his colleagues that by April 15, when Americans see the personal impact of permanent tax cuts Trump shepherded through Congress this year, everyone will feel great.

Trump has a plan to guarantee a high-growth economy next year: cutting interest rates. Recently, he stated he wants “the lowest rate in the world” — indeed “1% and maybe lower than that.”

Early next year, Trump is set to appoint a new Federal Reserve chairman. He noted that one leading candidate, Kevin Warsh, “thinks you have to lower interest rates” and “so does everybody else I’ve talked to.”

Lower rates mean easy credit for businesses and individuals to finance improvements, new ventures, or other spending. But this approach is a recipe for inflation.

The benefits Americans receive from keeping more of their earnings through Trump’s tax cuts could be wiped out if inflation accelerates. A Harvard/Harris poll last week found 57% of voters believe Trump is losing the fight against inflation — an improvement from last month’s 60%, but still a warning the administration cannot afford to ignore.

If Trump gets inflation wrong, nothing he gets right will save the GOP in next November or in 2028.

Trump’s overall approval ratings, in the low 40s, are slightly higher than Barack Obama’s or George W. Bush’s at this point in their second terms. However, both Obama and Bush saw their parties lose significant ground in the subsequent congressional elections and neither was succeeded by a member of their own party.

Trump is betting big on artificial intelligence to drive an economic boom akin to Bill Clinton’s telecommunications revolution. The administration aims to outpace China in AI development, prompting Trump to issue an executive order limiting states’ ability to regulate the technology.

A report notes that while a large car company might promise $5 billion or $10 billion in investment, big AI companies can raise and spend orders of magnitude more — and “Trump is good at counting zeroes.”

However, public sentiment about AI is mixed: 50% of Americans polled by Pew this fall say they are more concerned than excited about increased use of AI in daily life, compared to only 10% who are more excited than concerned.

Trump cannot rely on AI to deliver the economic “A-plus” he believes he deserves.

What the administration can do is boost other sectors by prioritizing regulatory reforms in Year 2. Freeing up the economy offers a healthier alternative to a Fed-driven credit binge.

Interest-rate cuts may produce immediate euphoria, but their withdrawal symptoms are deadly — as debt-driven booms turn into devastating busts.

Trump inherited a debilitated economy from a debilitated President Biden; voters will make some allowance for that. But what they won’t do is give the GOP another chance if it makes inflation worse instead of better.

Americans voted for Trump; if they end up with Biden’s economy anyway, there will be hell to pay at the ballot box.

Daniel McCarthy is a recognized expert on conservative thought and editor-in-chief of Modern Age: A Conservative Review. He has contributed to various publications and appeared on multiple radio and television programs.