Trump Calls for Federal Reserve Interest Rate Cuts

TLDR

• Trump criticized Powell for maintaining high interest rates.
• Inflation rates have risen to 2.7%, exceeding the Fed’s target.
• Gold prices reached a new high of $5,300 per ounce.

Donald Trump, former U.S. President, recently called for the Federal Reserve to implement immediate interest rate cuts. This demand follows the Federal Open Market Committee’s (FOMC) decision on January 28, 2026, to maintain the federal funds rate between 3.5% and 3.75%. This decision comes despite previous reductions totaling 75 basis points since September 2025.

Federal Reserve Chair Jerome Powell, nominated by Trump in 2017, currently leads the FOMC. However, he has faced criticism from Trump, who expressed his views publically, calling Powell a “moron” on Truth Social. Trump’s criticism is rooted in his perception that high interest rates are detrimental to the current economic climate.

Powell’s Reaction to Trump’s Pressure

During a press conference held on January 28, Powell justified the FOMC’s decision to hold rates steady. He stated, “What we’re saying is we’re well positioned as we make decisions, meeting by meeting.” This marks a consistent approach by the committee, prioritizing measured and strategic monetary policy decisions over sudden changes.

The backdrop to this decision includes a Justice Department investigation into Powell’s congressional testimony from 2025 regarding Federal Reserve building renovations. Powell described the investigation as “unprecedented” in a prior message on the Fed’s website.

Economic Indicators and Market Reactions

The economic environment is showing mixed signals. Inflation rates have increased to 2.7%, exceeding the Fed’s target of 2%. Additionally, the dollar’s value has decreased to its lowest point since 2022, with the euro trading at $1.20.

Amidst currency fluctuations, gold prices have risen, reaching a new high of above $5,300 per ounce, as investors seek safe havens. This trend aligns with fresh geopolitical discussions regarding Greenland.

Cryptocurrency Market and High Interest Rates

The cryptocurrency market faces pressures from high interest rates, which reduce liquidity for risk assets. This environment poses challenges for Bitcoin and Ethereum, though no direct impacts have been quantified. The weakness of the dollar could nonetheless boost Bitcoin, much like gold, as a hedge against market fluctuations.

• No direct changes in DeFi borrowing or altcoin speculation noted.
• No significant updates on crypto exchange regulations from primary sources.

Historically, Trump’s critiques of Powell during his presidency also coincided with trade tensions without causing immediate rate cuts. A parallel event occurred in 2025, when new trade tariffs led to a 6% decline in the dollar’s value.

No statements from prominent crypto figures like Arthur Hayes, CZ, or Vitalik Buterin were available in primary sources to provide insights or reactions to these economic dynamics.

The Broader Context of Economic Decisions

The broader context includes plans by Trump to appoint Powell’s successor by May 2026, when his term expires. In parallel, the labor market shows signs of weakness, adding to the complexity of the interest rate discourse.

Treasury Secretary Scott Bessent has affirmed a strong-dollar policy despite Trump’s comments favoring a weaker dollar. This adherence suggests stability is the goal amidst fluctuating global conditions.