Trump’s Call for Rate Cuts: Potential Impact on Major Banks and Financial ETFs

President Trump has posted a new announcement on Truth Social, the social media platform. He wrote:

““Too Late” Powell complains about costs, much of which were produced by the Biden Fake “Government,” but he could do the biggest and best job for our Country by helping to lower Interest Rates and, if he reduced them to the number they should be, 1% to 2%, that “numbskull” would be saving the United States of America up to $1 Trillion Dollars per year. I fully understand that my strong criticism of him makes it more difficult for him to do what he should be doing, lowering Rates, but I’ve tried it all different ways. I’ve been nice, I’ve been neutral, and I’ve been nasty, and nice and neutral didn’t work! He’s a dumb guy, and an obvious Trump Hater, who should have never been there, I listened to someone that I shouldn’t have listened to, and Biden shouldn’t have reappointed him. We have virtually No Inflation, our Economy is doing really well, and will soon be doing, with the tremendous Tariff Income coming in, and Factories being built all over the Country, better than it has ever done before. If he was concerned about Inflation or anything else, then all he has to do is bring the Rate down, so we can benefit on Interest Costs, and raise it in the future when and if these “other elements” happen (which I doubt they will!). Don’t say that you think there will be Inflation sometime in the future, because there isn’t now but, if there is, raise the Rates! We should be at the TOP of the attached List, not the bottom. I don’t know why the Board doesn’t override this Total and Complete Moron! Maybe, just maybe, I’ll have to change my mind about firing him? But regardless, his Term ends shortly!”

How Will Trump’s Statement Affect the Stock Market?

This latest post has the potential to affect the stock market. That’s because Donald Trump’s criticism of Federal Reserve Chair Jerome Powell and his call for lower interest rates could lead to increased volatility in the stock market, particularly affecting financial institutions like Bank of America, JPMorgan Chase & Co., and Wells Fargo & Company. If investors anticipate a potential rate cut, it may lead to short-term gains in banking stocks due to the prospect of increased lending activity, but could also raise concerns about long-term profitability if rate cuts signal economic instability. Financial ETFs such as the Financial Select Sector SPDR Fund, SPDR S&P Regional Banking ETF, and Vanguard Financials ETF may experience fluctuations as they are heavily weighted towards the financial sector, which is sensitive to interest rate changes.

Here are some of the stocks that might be affected:
Bank of America ((BAC)),
JPMorgan Chase & Co. ((JPM)),
Wells Fargo & Company ((WFC)),
Financial Select Sector SPDR Fund ((XLF)),
SPDR S&P Regional Banking ETF ((KRE)),
Vanguard Financials ETF ((VFH)).