What did Donald Trump do today?

He made his most bizarre threat yet against the Federal Reserve.

This morning on his boutique social media site, Trump threatened to destroy the US economy quickly if the Federal Reserve didn't agree to destroy it slowly. 

There's a lot to unpack here, but the obvious starting point is that cutting off trade with every country with which the United States currently has a trade deficit would mean an absolute boycott of 93 of the world's 221 distinct nations or trading zones. Together, those 93 countries comprise 81% of all trade the United States does (imports and exports). It includes nine of the United States' ten biggest trading partners. If Trump could carry out such a threat, it would wipe $4.2 trillion dollars (out of $5.1 trillion total foreign trade) from the books. 

However, Americans would still be free to import bitter oranges from Haiti, sushi-grade tuna from Kiribati, and postage stamps from Vatican City. 

It's true that Trump does at least in theory have the legal power to cut off trade with a given country, though not at all an "absolute right." For obvious reasons, this has never actually been done outside of war. Trump hasn't even officially cut off trade with Iran during his current war—in fact, in March he put himself in the humiliating position of having to lift sanctions against Iran mid-war.

But it's unlikely that the Supreme Court would uphold Trump if he tried to cut off trade with 4/5ths of the world economy, on the grounds that, as one justice once put it, the Constitution is not a suicide pact. For that matter, Trump would almost certainly be impeached or removed from office via the Twenty-Fifth Amendment on grounds of incapacity if he tried to do this, even assuming his staff was willing to try to carry out the order.

Lowering interest rates in the teeth of already high inflation would absolutely make that inflation much worse. That's why the Fed—which is now chaired by Trump's own appointee—has refused to do so.

But Trump has a personal financial interest in lower interest rates. In spite of massively ballooning paper wealth thanks to his crypto schemes, Trump is still heavily in debt on his properties, owing more than $600 million on them. Refinancing at dramatically lower interest rates would save him hundreds of millions of dollars going forward. It would also likely help Trump's businesses, which were struggling before his re-election, in other ways. Unlike most Americans, paper billionaires like Trump can only borrow money that their income or collateral would let them pay back, so unlike Trump, they can't use near-zero rates to make speculative investments.

Likely in the expectation that he could force the Fed to drop interest rates, Trump has bought hundreds of millions of dollars in bonds since returning to office. Bond prices go up as rates go down, so a sudden drop in interest rates would create an instant windfall profit for Trump.

But with the national debt now at about $40 trillion—a tenth of which has been added since Trump returned to office last year—even if the Fed defied all economic logic and dropped rates now, investors would still probably demand high yields on bonds given the hyperinflation that would result. 

This is the second creative attempt to influence the bond market Trump has had recently. In a moment of cognitive difficulty last month, he suggested that military force was an option.

Why does this matter?

• If Trump weren't the president of the United States, this kind of thing would be grounds for a family member getting a court order to take control of his finances for his own protection.  

• Presidents don't have to be expert economists, but they do have to be able to understand basic concepts at a middle-school level.