- Trump wants U.S. interest rates around 1% in 2026.
- He is evaluating new Federal Reserve leadership to pursue that goal.
- Fed projections currently signal only limited rate cuts next year.
Trump Pushes for Ultra-Low Interest Rates
In a bold statement, former President Donald Trump said U.S. interest rates should drop to 1% or even lower by the year 2026. This comes as part of Trump’s broader economic agenda, where he emphasizes the need for aggressive rate cuts to stimulate growth and support businesses.
Trump has been vocal about his dissatisfaction with current Federal Reserve policies, which have maintained higher rates to manage inflation. If re-elected in 2024, Trump is likely to push for rapid policy changes that align with his low-rate vision.
Plans for a New Fed Chair in 2026
Trump’s comments aren’t just talk. He’s reportedly considering replacing current Fed Chair Jerome Powell when his term ends in 2026. Names like Kevin Warsh and Kevin Hassett are being discussed as potential successors—both seen as more favorable to aggressive monetary easing.
By selecting a Fed leader who supports low interest rates, Trump aims to ensure that the U.S. economy is driven by cheaper borrowing and more liquidity, boosting both business investments and consumer spending.
Current Fed Policy Points in a Different Direction
The Federal Reserve, however, has signaled a more cautious approach. After several rate hikes over the past two years, the current rate is around 3.5%, and Fed projections suggest only minor cuts in 2026.
Analysts note that for rates to reach 1% under normal conditions, the economy would either need to weaken significantly or face political pressure. Trump’s aggressive stance highlights the growing divide between the White House’s economic priorities and the Fed’s independent policy decisions.
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