U.S. President Donald Trump renewed pressure on the Federal Reserve to drastically reduce interest rates, calling for a cut of at least 3 percentage points to alleviate the economic burden of high borrowing costs and national debt refinancing. His comments came through a strongly worded post on Truth Social on Wednesday, July 9.

“Our Fed Rate is AT LEAST 3 Points too high,” Trump wrote.
“High rates cost the U.S. $360 billion per point annually. No Inflation, COMPANIES POURING INTO AMERICA. ‘The hottest Country in the World!’ LOWER THE RATE!!!”

Trump’s statement reflects his continued belief that aggressive monetary easing is essential not only to manage the national debt burden, but also to sustain the momentum in economic growth and corporate investment in the U.S.

Debt Cost Argument Gains Attention

The centerpiece of Trump’s argument is the interest cost of managing the U.S. national debt, which currently exceeds $34 trillion. At prevailing interest rates, the cost of servicing this debt has surged. According to Trump:

• Every 1 percentage point in interest rates costs the government $360 billion annually.

• A 3-point reduction, therefore, could potentially save over $1 trillion over time.

Trump’s comments are aimed at pushing the Fed toward a much looser policy stance, even as the economy continues to show resilience and headline inflation remains subdued.

FOMC Minutes Signal Possible Rate Cut in 2025

Coinciding with Trump’s remarks, the minutes of the Federal Open Market Committee (FOMC) meeting held on June 17–18 were released, revealing that most Fed officials agreed a rate cut would likely be appropriate later this year, provided the economic data continues to support it.

Key highlights from the FOMC minutes:

• Data-dependence remains central to any future rate decision.

• Inflation expectations are anchored, and officials believe that recent inflation spikes—especially those caused by tariffs—may be “temporary or modest.”

• Risks to growth remain balanced, with no immediate signs of a broad inflation resurgence.

Fed officials appear cautious, focusing more on sustained disinflation and macroeconomic stability rather than reacting to political statements or short-term market moves.

Backdrop: Political Pressure vs. Economic Caution

Trump’s statement is the latest in a series of public appeals he has made in recent months, positioning monetary easing as a key component of his re-election campaign. His rationale:

• No inflation pressures—a green light for cuts

• Corporate interest in investing in the U.S.

• Global uncertainty justifying a more accommodative policy

However, the Federal Reserve maintains its independence and has so far resisted political influence, reiterating that monetary policy decisions are based on economic data, not political narratives.

Market Implications and Economic Outlook

Following both Trump’s comments and the release of the FOMC minutes:

• Bond yields eased slightly, reflecting growing expectations of a policy shift.

• Dollar weakened marginally, as traders priced in the possibility of looser monetary conditions.

• Equity markets remained largely stable, awaiting clarity from upcoming U.S. inflation and jobs data.

With inflation currently hovering near the Fed’s 2% target and signs of softening in consumer spending, the case for a rate cut in H2 2025 is building. But analysts warn that the Fed will likely move cautiously, balancing growth support with financial stability.

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