Trump Pressures Powell Over Rate Cuts as Market Prices 60% Chance of 75-basis-point Cut by Year-end

President Donald Trump has intensified public pressure on Federal Reserve Chair Jerome Powell to implement aggressive interest rate cuts, framing the move as essential to addressing economic challenges including high borrowing costs and housing affordability. During a July 15, 2025, visit to the Federal Reserve, Trump labeled Powell a “numbskull” for resisting “large reduction” demands, arguing that lowering rates by over three percentage points could save the nation $1 trillion annually in costs and stimulate growth [6]. The president criticized Powell’s policy as “too late” and lacking the “courage” to act, despite the Fed chair’s insistence that decisions must remain data-driven and independent of political influence [1].

Trump’s rhetoric has sparked market speculation about potential policy shifts. Investors now price in a 60% probability of a 75-basis-point rate cut by year-end, up from 40% in late June, according to futures data [7]. The president’s public campaign—leveraging social media and press conferences—has amplified debates over the Fed’s autonomy, with some analysts suggesting it reflects a strategic effort to sway decisions ahead of the 2024 election cycle [2]. Powell, however, has maintained a firm stance, stating in private conversations with allies that the central bank must avoid politicizing monetary policy to preserve its credibility [4].

The tension has broader implications for financial markets. Trump’s calls for rate cuts could influence asset volatility, with cryptocurrencies like BTC and ETH—sensitive to macroeconomic shifts—potentially experiencing increased risk sentiment [5]. Historical patterns show bullish movements in BTC during Fed rate cuts, raising questions about the interplay between political pressure and institutional independence [3]. While Powell’s adherence to data-driven decisions appears resolute, the White House-Fed standoff underscores a key challenge for central banks: balancing economic realities with external scrutiny.

Sources:

[1] [title: What Powell is telling allies as Trump pressures him to resign] [url: https://www.cnn.com/2025/07/25/politics/powell-trump-fed-chair-resign-fire]

[2] [title: Trump Escalates Pressure on Powell for Rate Cuts Amid ...] [url: https://www.ainvest.com/news/trump-escalates-pressure-powell-rate-cuts-tense-2025-visit-2507/]

[3] [title: Trump suggests Fed may be ready to lower interest rates] [url: https://www.yahoo.com/news/articles/fed-says-grateful-trumps-encouragement-123628072.html]

[4] [title: Central bank showdown: Trump pushes, Powell stands firm] [url: https://m.economictimes.com/markets/stocks/news/central-bank-showdown-trump-pushes-powell-stands-firm/trumps-rate-cut-demands-continue/slideshow/122897096.cms]

[5] [title: Trump suggests Fed Chair may cut interest rates] [url: https://www.yahoo.com/news/articles/trump-suggests-fed-chair-may-132040935.html]

[6] [title: Central bank showdown: Trump pushes, Powell stands firm] [url: https://m.economictimes.com/markets/stocks/news/central-bank-showdown-trump-pushes-powell-stands-firm/trumps-rate-cut-demands-continue/slideshow/122897096.cms]

[7] [title: Trump Presses Powell on Rate Cuts as Market Prices Two ...] [url: https://www.ainvest.com/news/trump-presses-powell-rate-cuts-market-prices-reductions-year-2507/]