Markets are digesting the Federal Reserve's latest quarter-point rate hike, and people are debating a controversial proposal from the Trump administration to issue $5,000 payments to adult citizens if Republicans win the House and Senate in the November elections.
The president says the dividend checks will "happen 100 percent … because our country is taking in trillions and trillions of dollars."
Though the Trump administration has not yet provided a detailed funding plan, tariff revenue and other economic gains would apparently fund the proposed $5,000 dividends.
But most voters are skeptical, with several dismissing the idea as unrealistic while pointing to Congress, the nation's debt and previous promises they said never materialized, and experts from both sides of the aisle still have questions.
E.J. Antoni, chief economist for The Heritage Foundation, has been blunt about the fiscal math.
"I have no idea what's going on with the $5,000 payment plan, to be perfectly honest with you," he recently told the "Washington Watch" program when asked to break down the numbers.
"No idea where that came from, where the money would come from to finance it—that is entirely unclear," he said. "How on earth you can spend another dime right now without increasing the deficit and therefore the debt is completely unclear."
Antoni also noted that the Fed's recent move on rates largely followed where the bond market had already gone — driven heavily by energy shocks and rising treasury yields since the start of the conflict with Iran.
The economist warned that policymakers are looking at the wrong tools to solve persistent price pressures.
"The reason that prices have been rising recently is not a monetary problem; it's an energy problem," he explained. "You can't fix an energy story with monetary tools. A higher cost of capital is not going to bring another barrel of oil to market."
Until energy supply pressures and deficit-spending concerns are addressed directly, Antoni said consumers should not expect monetary adjustments to fix the broader cost-of-living squeeze.
