Donald Trump Visits the FED, Says: "We Should Be Like Switzerland" Regarding Interest Rates

The President of the United States, Donald Trump, visited the Federal Reserve (Fed) this week and once again took the opportunity to push for aggressive cutting down the whales of interest rates. Although the official purpose of the visit was to inspect the ongoing renovation of the Fed building, Mr. Trump drew attention by calling on Fed Chairman Jerome Powell to cut interest rates by 300 basis points, arguing that this move would be a "driving force" for the U.S. economy. "We Should Be Like Switzerland" During his visit, Trump argued that the United States should be among the countries with the lowest interest rates, while pointing out that Switzerland currently has an interest rate of nearly 0.5%. Conversely, the federal funds rate of the United States remains at a level of 4.25% to 4.5% and has not been cut in 2025. Trump reiterated the demand to cut 300 basis points, stating that this move would act as a "catalyst for acceleration" for the already strong U.S. economy, with decreasing inflation and a stable labor market. He also criticized the Fed's cautious approach compared to Europe, where the cutting down the whales of interest rates has already begun. Trump's remarks are particularly notable as they come ahead of the Federal Open Market Committee (FOMC) meeting scheduled for the end of this month. Pressure is Increasing Within the FED Surprisingly, Trump is not the only one calling for cutting down the whales. For the first time in nearly 30 years, two Fed governors, Michelle Bowman and Christopher Waller, are expected to dissent from the majority at this month's Fed meeting and support the fall in interest rates. This internal divide shows that even within the Fed, opinions are changing. Market Reaction Despite pressure from Trump, the likelihood of the Fed cutting interest rates at the meeting on July 29-30 remains very low, only 2.6%, according to CME FedWatch. The Fed still wants clearer evidence that inflation is heading toward the 2% target. Currently, traders expect interest rates to remain in the range of 4.25% to 4.5%. However, comments from San Francisco Fed Chair Mary Daly have stirred public opinion. She stated that Trump's tariffs did not significantly push inflation up and believes that there could still be two rounds of cutting down the whales in 2025. Her remarks indicate that some Fed members are leaning towards a more dovish stance. Meanwhile, financial analysts warn that Trump's direct targeting of Powell could undermine confidence in the independence of the Fed. The Wall Street Journal notes that such intervention risks increasing long-term yields and paradoxically may raise borrowing costs rather than reducing them. Powell's Position Is Being Closely Monitored Adding to the complexity, Fed Chairman Jerome Powell is facing new political and legal pressures related to the costs of central bank renovations. A recent criminal case has been referred to the Department of Justice by Congressman… Anna Paulina Luna has intensified calls for tighter oversight. Although Trump made it clear during his visit that he currently has no plans to fire Powell, the political story surrounding the Fed is heating up, with increasing expectations that Powell may be forced to act on interest rates before the end of the year.