Trump Calls For Emergency Fed Rate Cut Before Next Week’s FOMC Meeting

U.S. President Donald Trump has called for an emergency Fed rate cut just before next week’s FOMC meeting. This comes as the U.S.-Iran war threatens to drive inflation higher, with crypto traders betting the Fed will make only one interest rate cut this year.

Trump Urges Powell To Make An Emergency Fed Rate Cut

In a Truth Social post, the U.S. President said that Fed Chair Jerome Powell should cut interest rates immediately rather than wait until the next meeting. The next FOMC meeting is set to hold next week, where the Fed is likely to hold rates steady.

CME FedWatch data shows a 99.2% chance that the FOMC will hold rates steady next week, rather than making the first cut of the year. Trump’s call for an intermeeting Fed rate cut comes amid the Iran war, which is raising inflation risks due to the rising oil prices. Experts predict that the war could cause the FOMC to wait longer before making any rate cut.

As CoinGape reported, Goldman Sachs has delayed its Fed rate cut forecast, predicting that the committee will make the first cut in September, rather than in June. The bank also predicted that the FOMC will make another cut in December.

This means that Trump may not get the Fed rate cut he continues to push for, even when Powell’s term ends in May. Following his nomination of Kevin Warsh as the next Fed chair, the U.S. president signaled confidence that Warsh would lower rates once he succeeds Powell.

Only One Intermeeting Cut In The Last Six Years

The last time the Fed made an intermeeting cut was on March 15, 2020, during the COVID-19 period, which put pressure on the global financial markets. Markets have so far held steady amid the U.S.-Iran conflict. However, JPMorgan has warned of a potential sell-off as market participants begin to price in a prolonged war.

Notably, the odds of the Iran war lasting until May have spiked to 70% on Polymarket, signaling that crypto traders are beginning to see the conflict as likely to last for a while. While a rate cut looks unlikely anytime soon, the Trump administration is taking several steps to curb the rising oil prices in a bid to avoid the inflationary pressure.

As CoinGape reported, the White House is considering waiving the Jones Act to ease the shipping of energy products around the U.S. Furthermore, Trump has authorized the Department of Energy to release 172 million barrels from the Strategic Petroleum Reserve.