Donald Trump advocates for sharp rate cut in US to 1%

Despite inflation risks, US President Donald Trump is urging the Federal Reserve to ease monetary policy by cutting the interest rate to 1%, down from the current range of 4.25%–4.50%. This comes as consumer prices are rising due to new import tariffs enacted on key trading partners.

Trump’s recent tariffs on $3 billion in foreign goods have increased costs for American households. Analysts at Yahoo Finance warn that these trade barriers could drive inflation up from 2.4% to 3.5%.

The President’s rush for rapid rate cuts has drawn attention, as such aggressive reductions are only seen during economic recessions.

However, Treasury Secretary Steven Mnuchin and White House Advisor Kevin Hassett remain optimistic about future GDP growth. They argue that if the federal government were to implement a more relaxed monetary policy, it would result in a reduction of borrowing costs, thereby making it easier to refinance the national debt.