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Trump Says Interest Rates Should Be 1% Amid September Rate-Cut Optimism

U.S. President Donald Trump has insisted that interest rates should be at 1%, even as a 25 basis points Fed rate cut is likely in September.
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Trump Says Interest Rates Should Be 1% Amid September Rate-Cut Optimism

Highlights

  • Donald Trump believes that the Fed rate should be at least 300 basis points lower.
  • He also said that he plans to reveal the next Fed Chair soon.
  • Th odds of a 25bps September Fed rate cut have reached 99%.

U.S. President Donald Trump has again commented on the interest rates and how low they should be. The president also revealed his plans to name Fed Chair Jerome Powell’s successor soon, despite earlier reports that the administration is currently interviewing 11 candidates. Meanwhile, the odds of a September Fed rate cut has reached a new high.

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Trump Comments On Interest Rates Amid Fed Rate Cut Hopes

During his visit to the Kennedy Center, the U.S. president said that he believes that interest rates should be three or four points lower, bringing the rates down to 1%. He remarked that despite the Fed’s refusal to cut rates, the U.S. economy is powering through it.

Meanwhile, Trump also said that he will name a new Fed Chair early, although Powell’s term doesn’t end until May next year. The president added that the shortlist is down to three to four names. He is likely to name a candidate who is fully in support of a Fed rate cut.

CoinGape had reported earlier that 11 candidates are on the list to replace Powell. Treasury Secretary Scott Bessent, who is in charge of the screening process, had also confirmed that he had expanded his search for candidates who could replace the Fed Chair.

In the meantime, Chris Waller is the favorite to replace Powell as the next chair. Meanwhile, Kevin Warsh and Kevin Hassett are currently the second and third favorites to become the next Fed chair. It is worth noting that Trump had earlier said that he had “two Kevins” and two others on his short list.

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Odds For A September Cut Soar

CME FedWatch data show that the odds of a 25-basis-point Fed rate cut in September have reached 99.9%. There is only a 0.1% chance that the FOMC will leave rates unchanged after the September 17 meeting.

Source: CME FedWatch

Interestingly, Scott Bessent had urged the Fed to consider a 50 bps rate cut in September. He reiterated this point today in a Bloomberg interview, saying that cuts should start with 50 bps in September.

He further remarked that interest rates should be 150 to 175 bps lower by now. He claimed that a Fed rate cut would have happened earlier if data had been accurate. This likely includes the U.S. job data, which had earlier suggested that the labor market was strong.

However, the July data showed that nonfarm payrolls rose to 73,000, lower than expectations of 147,000. Meanwhile, the May and June data were revised downwards from 144,000 and 147,000, respectively, to 19,000 and 14,000.

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Boluwatife Adeyemi

Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across several niches. His speed and alacrity in covering breaking updates are second to none. He has a knack for simplifying the most technical concepts and making them easy for crypto newbies to understand. Boluwatife is also a lawyer, who holds a law degree from the University of Ibadan. He also holds a certification in Digital Marketing. Away from writing, he is an avid basketball lover, a traveler, and a part-time degen.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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