President Trump has once again called for a 3-point reduction to the federal funds rate following the latest Consumer Price Index (CPI) inflation report.
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“Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!” said Trump in a Truth Social post on Tuesday.
With lower rates, the U.S. will be able to save money on its debt payments through instruments like bonds, notes, and bills.
Inflation Accelerates in June
However, year-over-year inflation is still well above the Fed’s target of 2.0%. In June, inflation increased by 2.7% YoY compared to 2.4% in May and 2.3% in April. The odds of a 25-bps rate cut this month have now plummeted to 2.6% compared to 6.2% yesterday and 23.0% a month ago.
At the same time, June’s YoY inflation was in line with the consensus estimate. “The data proves that President Trump is stabilizing inflation and the Panicans continue to be wrong about tariffs raising prices,” said White House Press Secretary Karoline Leavitt.
According to TipRanks’ Trump Dashboard, Bank of America (BAC), JPMorgan Chase & Co. (JPM), Wells Fargo (WFC), and three other stocks will likely be affected by Trump’s call for lower rates.
