Trump hints at his intention to replace the chairman of the Federal Reserve and seeks massive interest rate cuts
Former President Donald Trump mentioned plans to replace Federal Reserve Chairman Jerome Powell with the aim of drastic monetary easing, potentially targeting cuts of up to 300 basis points, according to a message from Kobisi (via BlockBeats). Trump argued that the current range of Federal Reserve interest rates, which is between 4.25% and 4.50%, is too restrictive and hinders economic growth.
However, most analysts believe that such drastic cuts are unlikely. Instead, they anticipate a more cautious approach, which could start with a 25 basis point reduction in September 2025.
Historical context:
Massive interest rate cuts, like those that occurred in the 1970s, often exacerbated wealth inequality by amplifying asset values while wage growth stagnated. Today, wealth distribution remains largely unbalanced:
The top 0.1% of Americans hold wealth more than 5.5 times that of the bottom 50%.
The top 1% of Americans own 51% of all U.S. stocks.
Further interest rate cuts could worsen these inequalities and risk fueling asset bubbles.
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