President Trump has reiterated his call for drastic cuts to the federal funds rate. The rate is currently in a range between 4.25% and 4.50%. It will likely remain the same following the Federal Open Market Committee (FOMC) meeting on July 29-30.
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“Our Rate should be three points lower than they are, saving us $1 Trillion per year (as a Country),” said Trump in a Truth Social post on Wednesday. “This stubborn guy at the Fed just doesn’t get it — Never did, and never will.” He added that Fed Chair Jerome Powell’s refusal to lower rates has negatively impacted the housing market.
September Rate Cut Odds Rise
Trump’s claim of $1 trillion in savings stems from lower U.S. debt interest payments as a result of lower interest rates. His request for lower rates will likely be fulfilled when the Fed meets in September, although the odds of a 3% drop are essentially at 0%.
At the meeting, there is a 60.1% chance of a 25 bps reduction, up from 58.0% yesterday and 54.5% a week ago. A 50 bps cut is also on the table, although the chances are extremely slim at 1.6%, down from 2.4% yesterday and 2.2% a week ago.
According to TipRanks’ Trump Dashboard, D.R. Horton (DHI), Lennar (LEN), PulteGroup (PHM), and three other stocks will likely be affected by his post.
