The discussion surrounding rate cuts in the U.S. has resurfaced amid former President Donald Trump’s public critique of Federal Reserve Chair Jerome Powell. Trump is adamantly calling for rate cuts, citing economic circumstances, whereas Powell remains adherent to a cautious approach.
Trump's Reasons for Rate Cuts
Trump has called for rate cuts for the 17th time, arguing that a cut of 2–3 percentage points could save the U.S. billions of dollars. He insists that high interest rates are detrimental to the economy and increase the government's debt burden, which already costs around $800 billion in debt servicing.
Powell's Caution Before Cuts
Powell continues to emphasize the necessity of data analysis before making decisions about rate cuts. He refers to labor market stability and existing inflation risks that, in his view, require a cautious approach. Powell highlights that premature cuts could undermine credibility if inflation rises afterward.
Impact on Crypto Market and the Economy Overall
The current rate environment creates uncertainty in the crypto market, leading to increased volatility and cautious investor behavior. It is expected that Powell may agree to cuts in the future, which could positively influence crypto investments. However, until then, investors are turning to safer assets such as cash and short-term securities.
Despite Trump's sharp statements, the Federal Reserve remains committed to data analysis and economic stability. This underscores that effective financial solutions must be based on facts rather than political demands.
