Donald Trump Visits FED, Says ‘We Should Be Like Switzerland’ on Interest Rates

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U.S. President Donald Trump visited the Federal Reserve this week and used the moment to once again push for big interest rate cuts. While the visit was officially to inspect the Fed’s ongoing building renovations, Trump made headlines by calling on Fed Chair Jerome Powell to slash interest rates by 300 basis points, saying it would be “rocket fuel” for the U.S. economy.

“We Should Be Like Switzerland”

Trump, during his visit, argued that the U.S. should be among the countries with the lowest interest rates, pointing out that Switzerland already has rates near 0.5%. 

In contrast, the U.S. federal funds rate remains between 4.25% and 4.5%, and has not seen a cut so far in 2025. Trump reiterated his demand for a 300-basis-point reduction, claiming the move would serve as “rocket fuel” for the U.S. economy, which he says is already strong, with inflation easing and labor markets stable.

He also criticized the Fed’s cautious approach compared to Europe, where rate cuts have already begun. Trump’s statements are particularly striking as they come ahead of the Federal Open Market Committee (FOMC) meeting scheduled for later this month.

Growing Pressure Inside the FED

Surprisingly, Trump isn’t the only one calling for cuts. For the first time in nearly 30 years, two Fed governors, Michelle Bowman and Christopher Waller, are expected to disagree with the majority at this month’s Fed meeting and support a rate cut. This internal divide shows that even within the Fed, opinions are shifting. 

Market Reaction

Despite Trump’s pressure, the chances of a rate cut at the July 29–30 Fed meeting remain very low just 2.6%, according to CME FedWatch. The Fed still wants stronger proof that inflation is heading toward its 2% goal. For now, traders expect rates to stay between 4.25% and 4.5%. 

Still, comments from San Francisco Fed President Mary Daly have stirred talk. She said Trump’s tariffs haven’t pushed inflation up much and believes two rate cuts in 2025 are still possible. Her remarks show that some Fed members are leaning more dovish.

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Meanwhile, Financial analysts warn that Trump’s direct targeting of Powell could shake confidence in the Fed’s independence. The Wall Street Journal notes that such interference risks higher long-term yields and could paradoxically raise borrowing costs, not lower them.

Powell’s Position Under Scrutiny

Adding to the complexity, Fed Chair Jerome Powell is facing renewed political and legal pressure over the central bank’s renovation costs. A recent criminal referral to the Department of Justice by Rep. 

Anna Paulina Luna has intensified calls for scrutiny. Although Trump clarified during his visit that he does not currently plan to fire Powell, the political narrative surrounding the Fed is heating up, with growing expectations that Powell may be forced to act on rates before year-end.