President Trump has said that the next Fed chair will cut interest rates “significantly,” sparking a debate about what political pressure on central banks and easing policies could mean for cryptocurrencies.
summary
- President Trump has said he will soon nominate a new Fed chair and expects the appointment to result in a “substantial” rate cut, an unusually direct political move on monetary policy.
- Traders are already debating the timing of a turnaround as high interest rates weigh on risk assets, and Fed officials are divided on how quickly inflation will cool.
- Bitcoin, Ethereum, and $XRP The market trades in a narrow range as it looks to inflation, employment and growth data for clues about how the Trump-era Fed will rebuild liquidity.
U.S. President Donald Trump said he would soon name the next Federal Reserve chairman, which he said would lower borrowing costs and signaled new pressure on the U.S. central bank's interest rate path as markets digest stubborn inflation and the second half of the economic cycle.
President Trump's Interest Rate Promises
Speaking at an event in Iowa on Tuesday, Trump told supporters he was close to deciding who will lead the Federal Reserve. “I think it will happen if we have a good Fed chair. We'll make an announcement soon. Interest rates will be significantly lower,” he said, directly linking his yet-to-be-named candidate to future easing cycles. The White House has not announced the final list of candidates, and there was no immediate comment from the Federal Reserve, which formally sets policy through the Federal Open Market Committee.
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Trump's comments highlighted the political stakes surrounding monetary policy, after aggressive policy tightening has kept benchmark interest rates in the U.S. at multi-year highs and raised the cost of mortgages, credit cards and corporate bonds. Although it is common for the president to appoint the Fed chair, it is still unusual for the Oval Office to clearly announce future interest rate levels after a personnel decision is made, and this is likely to attract scrutiny from investors wary of political interference.
Market and Cryptocurrency Background
Traditional markets are already poised to debate when and how quickly the Fed can change direction. Long-term interest rate policy has supported the dollar and compressed valuations in interest rate-sensitive sectors, even though speculative risks remain active. In digital assets, the largest number of cryptocurrencies traded in a mixed manner over the past 24 hours. Bitcoin (BTC) toggled around $89,100, moving roughly plus or minus 1% depending on venue, with 24-hour volume ranging from $34 billion to $39 billion. Ethereum (ETH) rose about 0.5% on the day, trading around 3,900 euros, after gaining about 14% for the week. $XRP ($XRP) was last around $1.88, down about 0.6% in 24 hours, giving it a market capitalization of nearly $115 billion.
For now, President Trump's promise that interest rates will fall significantly remains more of a political line than a policy roadmap. Until a name is named and the market can assess how that candidate will vote on the next interest rate decision, traders will be betting on the same data the Fed says it's currently focused on: inflation, employment, and growth.
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