President Donald Trump urged the Federal Reserve to slash interest rates to 1%, arguing it would reduce federal borrowing costs and boost economic growth. "We need a 1% rate. The Fed is killing growth," he said on Monday.
The federal funds rate currently stands at 5.25–5.50%, where the Fed has held it to control inflation and prevent economic overheating. Dropping rates to 1% would represent the most aggressive monetary easing since the COVID-19 pandemic.
Trump's call comes as federal debt servicing costs climb toward historic highs. While a lower rate could ease short-term interest payments on the national debt, economists warn it could destabilize the economy and rekindle inflation.
Reuters noted the move might offer temporary relief but risk long-term financial instability.
Source: Trading Economi
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