Trump Demands Fed Slash Rates to 1%—A Bold Play or Reckless Gamble?

Former President Trump turns up the heat on the Federal Reserve, pushing for drastic rate cuts that could reshape markets.

Will the Fed fold—or hold the line?

Trump's latest salvo targets Jerome Powell's playbook, demanding rates plunge to just 1%. Critics call it economic arson; allies see it as shock therapy for a stagnant system.

The move comes as crypto traders cheer any whiff of dollar weakness—because when traditional finance falters, digital assets feast.

One thing's certain: Wall Street's inflation calculators just got more exercise than a Peloton during lockdown.

TLDR

• Donald Trump has asked the Federal Reserve to lower interest rates to as low as 1%.
• He sent a handwritten note to Fed Chair Jerome Powell listing countries with lower rates.
• Trump criticized Powell for being too late in addressing interest rate changes.
• He said the high interest rates are damaging the U.S. economy and must be reduced immediately.
• Trump has stated that he will only appoint a Fed Chair who supports major rate cuts.

Donald TRUMP has intensified pressure on the Federal Reserve (Fed) to cut interest rates significantly from the current 4.25% to 4.5% range. He sent a handwritten note to Fed Chair Jerome Powell urging a cut down to 1%. The president compared U.S. rates with several countries that maintain lower benchmarks to support his demand.

The note, posted by the WHITE House Rapid Response account on X, included a chart of global central bank rates. Countries listed included Switzerland, Japan, Cambodia, Denmark, Thailand, and Seychelles, all with rates under 1.75%. Donald Trump highlighted these as examples of what he considers better monetary policy decisions.

pic.twitter.com/6cgJ7nI5OW

— Rapid Response 47 (@RapidResponse47) June 30, 2025

He criticized Powell’s stance on rate policy and accused him of harming the economy through delayed action. Donald Trump argued that inflation is not a current threat, making higher rates unnecessary. He emphasized that the Fed must act swiftly to avoid further economic setbacks.

Donald Trump Criticizes Fed and Targets Powell’s Leadership

Donald Trump stated that Jerome Powell’s approach continues to cost the U.S. financially due to delayed policy adjustments. He urged the Fed to cut rates significantly, calling the current level too high compared to international standards. The president maintained that the U.S. economy needs rate relief to remain competitive globally.

Trump has also questioned Powell’s ability to lead the Fed effectively under current conditions. He called on Powell to resign if he cannot deliver a rate cut soon. Donald Trump further indicated he WOULD nominate a new Fed Chair focused on aggressive rate reduction.

While Powell has stayed committed to a cautious policy outlook, Donald Trump is reportedly interviewing candidates to replace him. Powell’s term ends in May 2026, but Trump signaled an early announcement could come. He has shortlisted four potential nominees aligned with his monetary policy vision.

Market Expectations Shift Amid Trump’s Rate Cut Demands

Donald Trump’s push for lower rates is beginning to influence expectations within financial markets and among policymakers. Recent data from the CME FedWatch Tool shows the probability of a July rate cut has increased. Odds of rates staying unchanged dropped from 87.6% to 78.8%, showing rising anticipation for a policy shift.

The same tool indicates a 21.2% chance that the Fed may cut rates by 25 basis points at the next meeting. This reflects how Donald Trump’s rhetoric could be impacting rate speculation. Market participants are adjusting their forecasts based on signals from the White House and the Fed.

Federal Reserve Governor Christopher Waller suggested that a rate cut might occur as early as next month. Some FOMC members appear open to easing policy despite Powell’s reluctance. Donald Trump’s influence could shape the committee’s direction heading into the July 30 meeting.

Trump Sets Clear Conditions for Future Fed Leadership

Donald Trump continues to make monetary policy a central issue in his broader economic strategy. He made it clear he will only nominate a Fed Chair committed to substantial rate cuts. This condition narrows the field of eligible candidates significantly.

He has consistently criticized Powell’s leadership and framed him as an obstacle to economic growth. According to Donald Trump, faster rate cuts are essential to strengthen U.S. competitiveness and economic momentum. He has made clear that policy inaction will not be tolerated.

The upcoming months could be pivotal as Trump increases pressure while markets remain alert to Fed signals. Donald Trump’s focus on interest rates will likely continue to influence economic narratives throughout the rest of the year.