U.S. President Donald Trump has once again urged the Federal Reserve to cut interest rates immediately, suggesting during a White House meeting that policymakers should hold 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 has repeatedly called for rate cuts, including in a post on Truth Social last Thursday, where he said Federal Reserve Chair Jerome Powell “should be dropping interest rates, IMMEDIATELY.”
Earlier in January, Trump argued that the United States should have “substantially lower” rates — even “the lowest in the world.” He also criticized Powell as being “too late,” claiming that high interest rates are harming the economy and national security.
Trump has promoted lower rates as a way to reduce the cost of servicing the country’s $39 trillion national debt while boosting economic growth, housing, and stock market performance. Lower borrowing costs can also encourage investors to move into riskier assets such as equities and cryptocurrencies by increasing overall market liquidity.
Fed unlikely to move this week
The Federal Reserve is set to begin its two-day March policy meeting on Tuesday, with a rate decision expected on Wednesday. However, market expectations suggest little chance of a change.
Futures data from CME Group indicates a 99% probability that rates will remain within the 3.50% to 3.75% range this week. Expectations for the April 29 meeting are similar, with a 97% likelihood of no adjustment.
Despite this, some analysts believe Trump’s preferred successor to Powell, Kevin Warsh — who is expected to take over when Powell’s term ends in mid-May — may be more open to lowering rates.
Meanwhile, geopolitical tensions, including conflict involving Iran, have driven oil prices higher. Rising energy costs could increase transportation expenses and push up the prices of food and other goods, potentially fueling inflation and influencing the Fed’s policy decisions.
U.S. inflation held steady at 2.4% in February, but forecasts from Trading Economics suggest it could rise in March.
Fed likely to adopt a wait-and-see approach
Amid rising oil prices linked to tensions involving Iran, traders have already priced in the possibility of no interest rate cuts this year, according to Jeff Mei, chief operating officer of BTSE.
As a result, Mei noted that there may be less downward pressure on crypto asset prices. He added that the inflationary impact of higher oil prices remains uncertain, and the Federal Reserve is likely to maintain a cautious stance while monitoring the situation.
