- Donald Trump supported the Federal Reserve’s decision to pause rate cuts.
- The Fed held rates at 4.25%-4.5% due to inflation concerns.
- Trump previously pushed for lower rates but now calls the pause “the right thing to do.”
U.S. President Donald Trump expressed support for the Federal Reserve’s decision to pause its rate-cutting path, a clear break from his long-standing calls for lower interest rates.
“Maintaining the rates at this point was the right thing to do,” Trump told reporters upon his arrival in Washington on Sunday evening.
Last week, the Federal Open Market Committee (FOMC) announced that it would hold the federal funds rate steady at 4.25%-4.5%, citing concerns over inflation. The decision, reached unanimously, showed the Fed’s cautious approach given economic uncertainties.
Related: FOMC’s Rate Call Looms—What It Means for Bitcoin’s Next Move
Trump’s Uncharacteristic Alignment with the Fed
Trump has repeatedly urged the Fed to cut interest rates, including during a recent speech at the World Economic Forum in Davos on January 20.
On Wednesday, Federal Reserve Chairman Jerome Powell said the US central bank has no rush to change rates after policymakers voted to pause cuts, marking the first decision since Trump’s return to the White House.
Meanwhile, in a post on his Truth Social account, President Trump slammed both Powell and the Fed, accusing them of failing “to stop the problem they created with Inflation.”
Related: Trump Returns, Bitcoin Waits: What FOMC 2025 Means for Crypto
Despite his previous calls for rate cuts, Trump’s latest comments marked an unusual alignment with the Fed. His support arrived as his policies—including new tariffs and deportation measures—stoked worries about rising inflation.
How Does It Matter to Cryptocurrency
In most instances, when interest rates are cut, investors could have more liquidity to deploy elsewhere, often leading to an increase in the price of Bitcoin and altcoins.
However, Donald Trump’s backing of the pause of the interest rate cut could mean less liquidity, resulting in market stagnation and possibly even a wider sell-off.
As of this press time, Bitcoin is witnessing massive downtime, trading at $93,951, a 6.3% drop in the past day. Meanwhile, other altcoins are seeing double-digit price corrections, with Ethereum and XRP dropping by 20% and 21.4% in the same period.
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