Trump Demands 3% Interest Rate Cut, Fed and Markets on Edge
US President Donald Trump on July 22 intensified pressure on Fed Chair Jerome Powell, blaming him for keeping rates too high and calling for an immediate interest rate cut of three percentage points to 1%. He argued that elevated borrowing costs are squeezing homebuyers and slowing the housing market, and proposed eliminating capital gains tax on home sales. The White House plans to visit Federal Reserve headquarters to press its case. Treasury Secretary Benson and Deputy Secretary Bessant publicly backed lower interest rates, citing strong economic data, an expanded Fed mandate and rising government spending as reasons for urgent monetary easing. Traders should watch for shifts in US monetary policy and the timing of an interest rate cut, as a significant rate cut could trigger higher bond yields, equity market rallies and renewed crypto market volatility. The growing political tension around Fed policy adds uncertainty that may drive short-term surges in risk assets, including BTC and ETH.
Bullish
Pressure from the White House and Treasury on the Federal Reserve to implement a substantial interest rate cut is likely to boost risk appetite across markets. In the short term, speculation about lower borrowing costs can drive influxes into crypto assets, lifting prices. Over the longer horizon, sustained lower rates and higher liquidity tend to support crypto valuations as investors seek returns beyond traditional bonds and equities. Political uncertainty may cause sharp swings, but the overall effect favors a bullish outlook for crypto.