Trump Demands Interest Rate Cuts, Wonders Why the US Can’t Be Switzerland

In a bizarre but entirely on-brand move, U.S. President Donald Trump waltzed into the Federal Reserve this week, ostensibly to inspect some renovations. But in true Trump fashion, he quickly hijacked the moment to call for the Fed to dramatically slash interest rates by 300 basis points. Why? Well, according to him, such a reduction would act like “rocket fuel” for the U.S. economy. Because, apparently, all economies are just waiting for a turbo boost, right? 🚀

“We Should Be Like Switzerland”

Trump, in what can only be described as his take on global economics 101, argued that the U.S. should have interest rates that are as low as Switzerland’s, which, by the way, are hovering just above the zero mark at 0.5%. Meanwhile, the U.S. is still sitting pretty between 4.25% and 4.5%. How does he explain the difference? Well, it’s simple, really—cut those rates, and the economy will be a rocket ship to the moon (in a totally non-metaphorical way, we assume). 🚀

Despite the U.S. economy, as Trump claims, being “already strong” with inflation “easing” and labor markets stable (can we get a reality check, please?), Trump insists on slashing rates. Yet, this big, bold, and very Trumpian suggestion comes just ahead of the Federal Open Market Committee (FOMC) meeting scheduled later this month. Tensions are building like an overinflated balloon, and we’re not sure whether to pop it or let it float on.

Growing Pressure Inside the FED

In an unexpected plot twist, Trump isn’t alone in his call for cuts. For the first time in nearly 30 years, two Fed governors, Michelle Bowman and Christopher Waller, are gearing up to support a rate cut at this month’s meeting. Wait—what? An internal divide within the Fed? It’s almost as though even the Fed members are starting to think, “Hey, maybe lower rates aren’t the worst idea we’ve heard all week.”

Market Reaction

Despite Trump’s relentless pressure, the odds of a rate cut at the July 29–30 Fed meeting are about as likely as seeing a unicorn at a Wall Street gala—just 2.6%, according to CME FedWatch. The Fed wants hard evidence that inflation is actually heading toward the magical 2% target. For now, traders seem to expect the rates to stay firmly in the 4.25% to 4.5% range. Because, you know, reality.

Still, some chattering from San Francisco Fed President Mary Daly is stirring things up. She suggests Trump’s tariffs haven’t been much of an inflation trigger and that two rate cuts might still be on the cards for 2025. Some in the Fed are leaning toward the “dovish” side, which—let’s face it—sounds much nicer than “hawkish.” 🦅

But wait—there’s more! Analysts are warning that Trump’s ongoing direct targeting of Jerome Powell could shake confidence in the Fed’s independence. Ah, yes, because nothing says “stable economy” like undermining the very institution that controls the country’s financial future. Wall Street Journal even notes that such interference might paradoxically lead to higher long-term yields and—get this—raise borrowing costs. Perfect. 🤦‍♂️

Powell’s Position Under Scrutiny

If this weren’t already complicated enough, Fed Chair Jerome Powell is now under increasing political and legal pressure over the Fed’s renovation costs. A recent criminal referral from Rep. Anna Paulina Luna has added fuel to the fire. Powell has clarified that he doesn’t plan to fire himself (a relief for all involved), but the drama surrounding the Fed is heating up. People are starting to wonder if Powell will be forced to act on rates before the year’s end. Could this be the Fed’s version of a soap opera? Stay tuned! 📺

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2025-07-25 09:22