Trump Demands Fed Slash Rates to 1% in 2025: Waller vs. Hassett Battle Heats Up

• Why Is Trump Pushing for 1% Interest Rates?
• Who’s Likely to Become the Next Fed Chair?
• What’s Behind the Fed’s Internal Divisions?
• How Is Trump Trying to Reshape the Fed?
• What Economic Challenges Await the Next Fed Chair?
• How Are Markets Reacting to the Uncertainty?
• What’s the Timeline for These Major Decisions?
• Why Does This Matter for Everyday Investors?
• Trump vs. The Fed: FAQs

President Donald TRUMP is doubling down on his pressure campaign for the Federal Reserve to cut interest rates to 1%, creating a high-stakes showdown over monetary policy. While academic economists overwhelmingly favor Chris Waller as the next Fed chair, political realities suggest Kevin Hassett may have the inside track. The Fed’s recent quarter-point cut to 4-4.25% has only fueled Trump’s demands for more aggressive action, with his nominee Steve Miran pushing for deeper cuts. Meanwhile, the economy faces growing stagflation risks, and Trump’s attempted firing of Fed governor Lisa Cook adds another layer of drama. Here’s the full breakdown of this financial power struggle.

Why Is Trump Pushing for 1% Interest Rates?

President Trump has made no secret of his desire for ultra-low interest rates, repeatedly demanding the Fed cut its benchmark rate to just 1%. His reasoning? He believes this WOULD boost economic growth and reduce government borrowing costs. But there’s more to it – in my experience watching Trump’s economic moves, he’s always seen low rates as rocket fuel for markets and his reelection prospects. The Fed’s recent quarter-point cut to 4-4.25% clearly wasn’t enough for Trump, who wants rates slashed much faster.

Who’s Likely to Become the Next Fed Chair?

Here’s where it gets interesting. A Financial Times poll shows 82% of economists think Chris Waller should lead the Fed, but only 20% believe he actually will. Why the disconnect? Waller’s shown too much independence for Trump’s taste, even dissenting in July to push for a smaller rate cut. Meanwhile, Kevin Hassett – who 39% see as the likely successor – appears more politically palatable. Trump’s made clear he values loyalty and willingness to cut rates above all else. As Wharton’s Nikolai Roussanov put it, “Waller looks like a central banker... that’s precisely why he won’t get it.”

What’s Behind the Fed’s Internal Divisions?

The Fed isn’t just fighting Trump – it’s fighting itself. Trump’s nominee Steve Miran shocked everyone by dissenting and demanding a 50 basis point cut plus five more reductions this year. That’s way beyond what other policymakers support. Waller, though more cautious, had been one of two dissenters in July. This time he refused to back Miran’s extreme position. These splits reveal the intense pressure on the Fed as it balances inflation risks against political demands.

How Is Trump Trying to Reshape the Fed?

Trump isn’t just talking – he’s taking action. His attempt to fire Fed governor Lisa Cook over alleged mortgage fraud (which she denies) could redefine presidential power over monetary policy. Meanwhile, Treasury Secretary Scott Bessent is already interviewing candidates for the next chair, with Marc Sumerlin among 11 names on the longlist. Trump’s made his priorities clear: loyalty and rate cuts. As one BTCC analyst noted, “This isn’t just about economics – it’s about control of the world’s most powerful central bank.”

What Economic Challenges Await the Next Fed Chair?

Whoever takes the job inherits a minefield: tariffs disrupting supply chains, a cooling labor market, and growing stagflation risks. Most Fed officials expect Trump’s tariffs to cause temporary price spikes but are willing to accept slower hiring to prevent runaway inflation. Yet many economists now see stagflation – that ugly combo of high inflation and stagnant growth – as increasingly likely. The Fed’s dual mandate puts it in a tough spot, but history suggests it may prioritize jobs over inflation control.

How Are Markets Reacting to the Uncertainty?

Betting markets show Waller holding a narrow lead over Hassett, but political winds favor Hassett. crypto markets on exchanges like BTCC have shown increased volatility amid the Fed drama. Trump’s mentioned three favorites: Waller, Hassett, and former Fed governor Kevin Warsh. But with Treasury’s Bessent pushing for governance reforms and balance sheet reduction, the final decision could surprise everyone. One thing’s certain – the next Fed chair will need nerves of steel.

What’s the Timeline for These Major Decisions?

The first round of interviews wraps up in two weeks, with Trump likely to announce his pick soon after. The Cook firing case could reach a verdict around the same time, potentially setting new limits on presidential authority. Meanwhile, the Fed’s next rate decision in November looms large – will they resist Trump’s pressure or cave to his demands? Markets are pricing in at least two more cuts this year, but Trump wants five. This high-stakes game of chicken could define the 2025 economy.

Why Does This Matter for Everyday Investors?

Let’s be real – Fed decisions hit your wallet. Lower rates mean cheaper loans but also weaker savings returns. The stagflation risk could crush portfolios. And the chair battle? It’ll determine whether we get steady-handed policy or political puppetry. Personally, I’ve seen how Fed drama sends crypto markets on wild rides – just last month bitcoin swung 10% on Fed speculation. As one trader told me, “When elephants fight, the grass gets trampled.” Regular investors should watch this closely.

Trump vs. The Fed: FAQs

What interest rate does Trump want?

Trump is demanding the Federal Reserve cut rates to 1%, arguing this would boost growth and reduce government borrowing costs.

Who are the top candidates for Fed chair?

The main contenders are Chris Waller (favored by economists), Kevin Hassett (seen as politically advantageous), and dark horses like Kevin Warsh or Steve Miran.

How has the Fed responded to Trump’s pressure?

The Fed cut rates to 4-4.25% in September but resisted calls for more aggressive action, leading to internal dissent from Trump’s nominee Steve Miran.

What are the risks of cutting rates too quickly?

Overly aggressive cuts could fuel inflation, weaken the dollar, and reduce the Fed’s ability to respond to future crises.

How might this affect cryptocurrency markets?

Fed policy significantly impacts crypto valuations. Rate cuts typically weaken the dollar, which has historically benefited Bitcoin and other cryptocurrencies traded on platforms like BTCC.