Trump Calls for 1% to 2% Interest Rates, Pressuring Fed

U.S. President Donald Trump has called for a significant reduction in interest rates, advocating for a range between 1% and 2% during a televised interview on June 29, 2025. This statement has added pressure on the Federal Reserve to consider policy changes, potentially influencing market expectations and economic strategies.

Trump's proposal is part of a broader economic strategy aimed at stimulating growth, encouraging business investments, and creating jobs. He has argued that such a reduction could save the U.S. up to $1 trillion annually in interest costs on its debt. This stance aligns with his past efforts to influence U.S. monetary policy, particularly during his tenure as president.

However, Trump's advocacy for lower interest rates has been met with caution from Jerome Powell, the Chair of the Federal Reserve. Powell has emphasized the need for a measured approach in adjusting interest rates, highlighting the importance of careful policy adjustments. This divergence in opinion between the president and the Fed chair underscores the complex dynamics at play in U.S. monetary policy.

The potential impact of Trump's call for lower interest rates extends beyond traditional financial markets. A reduction in interest rates could infuse greater liquidity into various markets, including risk-on assets like major cryptocurrencies such as Bitcoin and Ethereum. Historical patterns suggest that dovish Fed guidance often aligns with increased trading volumes and capital inflows into these digital assets. However, market reactions remain mixed, with some traders expressing optimism while others remain cautious due to Powell's emphasis on careful policy adjustments.

Trump's push for lower interest rates is also tied to his broader economic policies, including the implementation of tariffs. He has argued that lowering interest rates would complement these tariffs, potentially boosting economic activity. This approach reflects his belief in the interconnectedness of monetary policy and trade policy in driving economic growth.

The debate over interest rates highlights the ongoing tension between political pressures and the independent role of the Federal Reserve. While Trump's calls for lower rates are driven by a desire to stimulate the economy, Powell's cautious approach reflects the Fed's mandate to maintain price stability and promote full employment. This dynamic underscores the importance of balancing short-term economic goals with long-term financial stability.

Trump's statement has triggered a notable response in the cryptocurrency market, with Bitcoin and Ethereum prices soaring amid expectations of monetary easing. This surge suggests increased investor confidence in high-risk assets as economic policy changes are anticipated. The potential rate cuts could reduce borrowing costs, spark inflation concerns, and shift investment focus toward riskier assets, including cryptocurrencies. Investors may realign portfolios to leverage better returns.

According to analysts, if Trump’s suggested rate reductions materialize, cryptocurrencies could see further bullish trends. However, ongoing regulatory challenges and potential volatility remain critical factors affecting both short-term and long-term market outcomes. The historical context of global interest rate cuts during the COVID-19 crisis in 2020 spurred a similar bull run in cryptocurrencies, reflecting today’s trends under Trump's rate-reduction calls.