According to ChainCatcher, U.S. President Trump has suggested that the Federal Reserve lower the benchmark interest rate to 1% to reduce government borrowing costs. Economists warn that a significant rate cut in an environment with an unemployment rate of 4.1% and an inflation rate of 2.5% could drive up inflation.
Historical data shows that a 1% interest rate typically occurs during economic crises, such as the 2008 financial crisis and the pandemic period in 2020. The 'Big and Beautiful Act' passed by the Trump administration is expected to expand the budget deficit, and combined with aggressive rate cuts, it may exacerbate market concerns about inflation.
Federal Reserve officials emphasize that there are risks to a significant rate cut before the impact of new tariff policies on inflation becomes clear.