Why Is Trump So Worried About Interest Rates?

Well, he's not likely worried), it's more likely that he's politically maneuvering for a future event. You see, as interest rates continue to inevitably rise, the cost of borrowing for the Federal Government and other state, county and city governments will rise with it. The reason this is so significant for a Trump presidency is that he's making his tax cuts while doing little about government spending, increasing deficits. Now, deficits are something that every president in recent history has done, but we're getting to the point where the historically low interest rates of the Obama presidency are coming to an end, meaning that Trump won't have the same luxury as Obama in the borrowing arena.

Forgetting about the fact that the houses of Congress are mostly responsible for budgeting concerns, and that the Federal Reserve is a private entity with semi-autonomous policy making decisions, Trump knows that he's going to be the one to look bad when the shit hits the fan and defaults begin to occur. Right now he's positioning himself to be able to say "you see, I told you that the Fed was going to sink the economy with rising interest rates, here's the tweets to prove it, so vote for me and I'll fix their mistake."

The Fed is between a rock and a hard place right now. They know that the economy is cyclical, but they're also tasked with preventing the cycle from happening and keeping the good times rolling in perpetuity, even though they know that's impossible. What goes up must come down as they say, and it's just a matter of time.

So they raise interest rates to signal to the markets that the economy is strong and that markets will be able to absorb the higher interest rates since there's so much money being made, but they make those interest rates so tiny that they aren't really significant, meaning that under the surface, they're not so confident in the economy and its resilience. Sooner or later however, those small increases begin to become significant, and people start to notice how expensive it's becoming to borrow money. Expensive money in a precarious economy will cause people to stop borrowing. The Fed can't go back on it because that would likely cause a panic in the markets, and if they continue to raise rates, they fear the ticking time bomb of debt that's under the floor boards will detonate.

Governments are overextended with debt as it is. Infrastructure continues to deteriorate. Social programs are largely unfunded. They can't even maintain what they're tasked with, even with low interest rates, let alone build something new that would cause their constituents to approve of their job performance. They have to borrow more just to keep making payments on the old debt. Raising interest rates, and therefore the cost of government entities to borrow, just turns the dials on the clock closer to detonation of the government debt bomb. Trump's just positioning himself to start the finger pointing away from himself so that he can win the next election, even if it happens before then.