Trump Demands Record-Breaking Rate Cut Amidst Fed Hike
The Federal Reserve raised interest rates for the first time since 2023 to address rising inflation, despite a resilient labor market. The target range was lifted from 3.50-3.75% to 3.75-4.00%, marking the first increase under new Fed Chair Kevin Warsh.
However, President Donald Trump responded by demanding a significant rate cut, asking for at least 300 basis points (bps), three times larger than any historic single-meeting cut. This would be the largest-ever single-meeting cut in Fed history, surpassing the record of 100 bps set in 2020 and 2008.
Trump insisted that rates 'should be 1%, or less, because we are the Best Credit in the World - BY FAR'. The White House spokesperson had previously commented on the situation, but Trump's statement came after the rate hike was announced. Analysts suggest that a genuine standoff between Trump and Warsh could inject volatility into risk assets, including crypto, heading into Q4.