Trump urges Fed to cut interest rates amid concerns about US economy

Jakarta, Pintu News – Former US President Donald Trump has again highlighted the Federal Reserve’s (Fed) monetary policy by calling for an interest rate cut as soon as possible. Through a post on the Truth Social platform, Trump warned that US-imposed trade tariffs are starting to impact the domestic economy.

The call comes amid the Fed’s decision to maintain its benchmark interest rate and raise inflation projections, signaling potential economic challenges in the form of stagflation-slow growth accompanied by rising prices.

Trump’s Call and Fed Policy

In his statement, Trump emphasized that the Fed should “cut interest rates immediately” as the impact of US tariffs begins to seep into the economic system. He called April 2 “Liberation Day in America,” linking it to the expiration of temporary exemptions to tariffs on imports from Canada and Mexico. According to Trump, swift action from the Fed is needed to prevent further economic weakness.

Meanwhile, the Federal Open Market Committee FOMC->Current FOMC PriceRp 0Market Cap-Trading Volume-Circulating Supply- decided to keep the benchmark interest rate at 4.25%-4.5% for the second consecutive time. However, the US economic growth projection was lowered from 2.1% to 1.7%, while the inflation forecast rose from 2.5% to 2.8%. The increase indicates concerns that tariff policies could exacerbate price pressures and slow growth.

Also Read: Bitcoin (BTC) Hasn’t Responded to Wall Street’s Demands, BlackRock Executive Warns

Economic Risk and Market Responses

The Fed acknowledged the increased risks in the economic outlook, mainly due to rising inflation and global uncertainty. Fed Chairman Jerome Powell mentioned that inflation is starting to pick up, most likely due to tariffs, and that the price recovery process may be delayed throughout this year. He also revealed that businesses and households are deeply concerned about downside risks to the economy.

Although there are no interest rate cuts in the near future, the Fed’s projections still show two rate cuts before the end of 2025. The latest dot plot chart expects interest rates to be at 3.75%-4% by the end of the year. However, there has been a shift in internal views: if in January only one FOMC member rejected a rate cut, now the number has increased to four people who suggest keeping rates on hold throughout this year.

Stock Market Reaction and Investor Optimism

The stock market responded positively to the Fed’s decision to maintain plans for future interest rate cuts. The Dow Jones Futures Index rose 71 points, the S&P 500 rose 0.3%, and the Nasdaq 100 increased 0.4%. In previous trading, the Nasdaq index had corrected more than 10% from its peak, but managed to rise 1.4%. Meanwhile, the S&P 500 also recorded a 1% increase and has the opportunity to end the downward trend for four consecutive weeks.

Some market analysts, such as Elyse Ausenbaugh of J.P. Morgan Wealth Management, believe that inflation concerns are not yet too worrisome for investors. She said that market participants still believe that the impact of tariffs will not cause long-term inflationary pressures, and the Fed still has control over the direction of monetary policy. This reflects the expectation that the fixed-rate strategy will be effective in stabilizing the economy in the medium term.

Implications for Crypto and Alternative Assets

Uncertain global economic conditions often increase the appeal of alternative assets, including cryptocurrencies. With the potential for monetary policy easing and rising inflation, investors are starting to look at crypto as a form of hedge against weakening purchasing power. Stablecoins, DeFi, and major cryptocurrencies such as Bitcoin BTC->Current BTC PriceRp 0Market Cap-Trading Volume-Circulating Supply- and Ethereum ETH->Current ETH PriceRp 0Market Cap-Trading Volume-Circulating Supply- are gaining popularity as a means of diversification and long-term investment instruments.

In such a situation, education about cryptocurrencies is important, including understanding their impact on the macroeconomy. Crypto is not only used as a speculative instrument, but is also starting to be recognized for its role in the global financial system, particularly in cross-border payments and risk management against central bank policy fluctuations.

Conclusion

Trump’s insistence that the Fed cut interest rates soon underscores concerns over the long-term effects of trade tariffs on the US economy. With inflation rising and growth slowing, the Fed’s monetary policy is now under intense scrutiny. Meanwhile, markets continue to monitor the latest economic data and brace for uncertainty that may open up new opportunities in the cryptocurrency and other digital asset sectors.

Also Read: This is Arhur Hayes’ BTC Price Prediction Based on April 2025 Fed Rate!

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Trading crypto carries high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying andselling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Cryptopolitan. Trump says the Fed should cut rates soon. Accessed March 21, 2025.
• Featured Image: Reuters