US President Donald Trump has again pressed the Federal Reserve to cut interest rates immediately, urging at a White House meeting that officials convene a “special meeting” to lower rates. “What’s a better time to cut interest rates than now? A third-grade student would know that,” Trump said, according to videos shared on X.
Trump repeated the call after posting on Truth Social that the Fed chair “should be dropping interest rates, IMMEDIATELY.” He has argued the US should have “substantially lower” rates and “the lowest in the world,” criticizing Jerome Powell as “too late” and saying high rates are “hurting our country, and its National Security.” Trump has framed lower rates as a way to reduce the cost of servicing the roughly $39 trillion national debt and to boost economic growth, housing and the stock market.
Lower interest rates can also push investors toward higher-risk assets such as stocks and cryptocurrencies by making borrowing cheaper and increasing market liquidity.
No rate changes likely at Fed’s Wednesday meeting
The Federal Reserve begins a two-day March meeting on Tuesday and is set to announce its decision on Wednesday. But CME Group’s FedWatch tool currently shows about a 99% probability that the policy rate will remain unchanged in the 3.50%–3.75% range this week, with a similar 97% probability of no change at the April 29 meeting.
This is despite expectations that Trump’s nominee for Fed chair, Kevin Warsh—who would take the post in mid-May when Powell’s term ends—may be more open to cutting rates.
Rising oil prices driven by the war with Iran complicate the outlook. Higher fuel costs lift transport and production expenses, which can push up food and other goods prices and add upward pressure on inflation, potentially prompting the Fed to raise rates instead. US inflation was steady at 2.4% in February but is expected to rise in March, according to Trading Economics.
Fed will play the waiting game
With the US-Iran conflict boosting oil prices, “traders have already priced in the likelihood of zero cuts this year,” Jeff Mei, chief operating officer at BTSE exchange, told Cointelegraph. That reduces the chance of downward pressure on crypto asset prices, he said, noting oil’s ultimate effect on inflation remains uncertain and the Fed is likely to “continue to wait out the situation.”
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