President Donald Trump has repeatedly called for the Federal Reserve to slash interest rates to as low as 1%, arguing that cheaper borrowing would spur economic growth. However, financial analysts warn that such a dramatic cut would be not only unrealistic but potentially harmful.
Experts describe a 1% rate as “ludicrous” given current inflationary pressures and economic conditions. They caution that slashing rates so steeply could unsettle businesses by signaling uncertainty or desperation, undermining confidence in the economic outlook.
Moreover, a sudden rate drop might trigger unintended consequences such as asset bubbles, currency instability, and reduced incentives for prudent lending. Instead of stimulating investment, it could increase volatility and risk in financial markets.
While lower rates can encourage borrowing and expansion, analysts emphasize the importance of a balanced, data-driven approach. For now, the Fed’s cautious stance aims to navigate inflation control without derailing growth—making Trump’s call for a 1% rate cut appear disconnected from economic realities.
