Trump demanded an immediate rate cut from the Fed, citing the strong US jobs report, the lack of hot inflation, and the ongoing challenges of the US budget deficit and national debt.
Trump Pressures the Fed Again
So, Trump is once more pressuring the Fed to cut interest rates and insists on urgency.
If “Too Late” at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due. Biden went mostly short term. There is virtually no inflation (anymore), but if it should come back, RAISE “RATE” TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!
And this brings us back to the already obvious assumption that Trump urgently needs more favorable interest rates to cover servicing the U.S. national debt. Budget cuts were supposed to help him significantly with that; however, Elon Musk’s departure highlighted that this mission was not fulfilled as intended.
Now Trump has returned to interest rates, which is especially relevant against the backdrop of the statistical indicators we observed recently. For example, BLS reported the creation of 139,000 jobs in May, exceeding the consensus forecast of 125,000, while unemployment remained at a historically low level, which most likely strengthened the Federal Reserve’s confidence in the robustness of the labor market.
Thus, lowering interest rates at the moment may not seem so unwarranted and could have a positive effect on financial markets, including DeFi.
Conclusion
Cutting rates amid what is called “no hot inflation” and relatively decent economic indicators could supply a noticeable influx of liquidity into the crypto industry, and here one might say Trump is playing to Web3. Let’s see the next moves.
