President Trump is once again calling for a reduction in interest rates following positive employment data in the U.S. Some analysts hope that new rate cuts will create positive momentum for Bitcoin.
However, there are no signs that Powell will change his mind. If anything has changed, it is even less likely. Tariffs can cause unprecedented chaos, and the economy currently does not need a rate cut to survive.
Can Trump force a reduction in interest rates in the U.S.?
Earlier today, the U.S. Bureau of Labor Statistics released its latest employment report, which looks quite positive amid recession fears.
Total employment in the non-agricultural sector increased by 177,000, significantly exceeding expectations, while the unemployment rate remained stable and wages grew. This prompted President Trump to once again call for a reduction in interest rates. President Trump has repeatedly appealed to Federal Reserve Chairman Jerome Powell to lower interest rates. The crypto industry is also actively supporting such a move, which would stimulate investments in riskier assets.
However, both Powell and other senior Fed officials have clearly stated that tariffs are too unpredictable to allow for further rate cuts.
Powell's position remains very consistent. Tariffs can seriously harm the economy, and the Federal Reserve must preserve its resources to prevent a future collapse. If rates are cut after positive news, the Fed will have one less tool in case of a real crisis.
Trump even threatened to fire Powell over the issue of rate cuts, but backed down after market panic. He cannot legally fire Powell; removing such a prominent regulator would undoubtedly cause chaos.
After the employment report was released, the market expected fewer rate cuts, and CME reported that a cut in May is virtually impossible. Frankly, the likelihood that Trump will get the desired rate cuts anytime soon is very low. Justin Wolfers, an economist at the University of Michigan, explained why the positive report actually reduces the likelihood of rate cuts:
"I am almost certain that the Fed will stay on hold at its next meeting. The real economy (for now) is strong enough not to require a rate cut. And big questions still remain on the horizon. Powell has been clear: he does not want to guess what is on the horizon; he wants to wait and see. The report is absolutely legitimate. The White House's interpretations are another matter," he said.
President Trump wants these rate cuts but cannot force them without creating bigger problems. Since tariffs are so chaotic and unpredictable, false rumors have moved the crypto market in several recent instances.
Traders should remain cautious about speculations that seem too good to be true.#Write2Earn #BinanceSquare #Squar2earn #TRUMP #Binance $TRUMP