Donald Trump Pushes For A 300 Basis Points Fed Rate Cut

Ahead of the incoming FOMC meeting in July, US President Donald Trump has reiterated the calls for a Fed rate cut. This time, the US President is pushing for a 300-basis-point cut to prevent steep economic losses, hinging his argument on falling inflation metrics.

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Donald Trump Wants A Sharp Fed Rate Cut

US President Donald Trump has fired another barrage of criticism at the Federal Reserve, urging a swift Fed rate cut ahead of July’s FOMC meeting. In a Truth Social post, the US President noted that the country’s interest rates are “at least 3 points too high,” requiring urgent action.

He argues that Fed Chair Jerome Powell is costing the US nearly $1 trillion in economic losses by refusing to taper interest rates. The US President goes on to brand Powell “too late” with the latest salvo coming after Trump urged Powell to resign and face a Congressional investigation.

“Too Late is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs,” said Trump.

Trump is backing his decision for a 300-basis-point Fed rate cut on waning inflation figures and the influx of fresh capital into the US. However, Powell has defended the Fed’s stance to keep interest rates steady, casting blame on inflationary risks from Trump’s tariffs. In a separate post, Trump shared research by the Council of Economic Advisers (CEA) in support of his claims that tariffs had zero impact on inflation.

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Will Powell Taper Rates In July?

While Trump has ramped up the pressure for Jerome Powell in recent weeks, the chances of a 300-basis-point cut are highly unlikely. Typically, the Federal Reserve adjusts rates by 25-50 bps each hike or cut, with a steady tapering over the coming months being the most plausible outcome.

With 21 days till the next FOMC meeting, the odds for the Fed to keep the interest rate steady between 425 and 450 have soared to 91%. Meanwhile, the odds for a July Fed rate cut have tumbled to 8% from a previous high of 23%. The odds rose sharply amid calls for an investigation into misleading statements made by Powell during a Senate hearing.

However, strong US job data in early July has doused enthusiasm for a Fed rate cut. Furthermore, fresh Trump tariffs on Japan and South Korea are stoking new inflationary concerns for the economy.

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