Trump interest rate cuts The Trump administration may be deliberately engineering market turmoil to pressure Federal Reserve Chair Jerome Powell into lowering interest rates, according to Bitcoin commentator Anthony Pompliano. In a post on X on March 10, Pompliano hypothesised that President Donald Trump and Treasury Secretary Scott Bessent are attempting to crash asset prices, forcing the Fed’s hand to reduce rates.
Pompliano, the founder and CEO of Professional Capital Management and host of The Pomp Podcast, claims that lowering interest rates is crucial to avoid the need to refinance $7 trillion in upcoming U.S. debt obligations. “Trump and his team are intentionally crashing the market,” he wrote. “Is this a master plan or are we watching uncontrolled destruction?”
Trump, Powell, and the Rate Cut Standoff
The theory comes as Powell recently refused to cut rates despite Trump’s repeated calls for lower borrowing costs. In January, the Fed held rates steady at 4.25% to 4.5%, maintaining its cautious stance amid inflation concerns. Pompliano argues that Trump’s recent tariffs contributed to the market panic, creating a more favorable bond market by driving down the 10-year Treasury yield from nearly 4.8% in January to 4.21%. Lower yields could justify rate cuts, making borrowing cheaper and boosting economic activity.
Regardless of whether Trump is intentionally manipulating markets, the stock market has suffered steep declines. On March 10, the S&P 500 (SPY) fell 2.66%, while the Nasdaq-100 dropped 3.8%, according to Google Finance data. Over the past month, both indexes are down 7.32% and 10.7%, respectively. The crypto market has been hit even harder. Bitcoin (BTC) has plunged 27.4% from its $108,786 all-time high, and over $1.2 trillion has been wiped from the overall crypto market cap since December 17.
Pompliano believes the financial standoff is now a “who blinks first” contest between Trump and Powell. While Trump has not confirmed such a strategy, he hinted at it during a March 9 interview with Fox News, stating: “Nobody ever gets rich when the interest rates are high because people can’t borrow money.” Pompliano argues that rate cuts would benefit the White House’s fiscal strategy and boost consumer spending by making capital cheaper.
Fed’s Rate Decision and Market Outlook
Despite mounting pressure, the CME FedWatch Tool currently estimates a 96% probability that the Fed will hold rates steady at its next meeting on March 19. However, the odds of a rate cut in May are now nearly 50-50. The Federal Reserve typically resists cutting rates when inflation is high, aiming to maintain price stability.
However, if the market downturn continues, a potential Trump-induced recession—which some have dubbed “Trumpcession”—could force the Fed to reconsider. As reported, digital asset investment products have recorded their fourth consecutive week of outflows, with investors pulling $876 million in the past week.
While the pace of withdrawals has slowed, overall sentiment remains bearish, bringing total outflows over the past month to $4.75 billion. This has significantly reduced year-to-date inflows to $2.6 billion and driven total assets under management (AUM) down by $39 billion to $142 billion, the lowest level since mid-November 2024.
In Summary
According to Bitcoin analyst Anthony Pompliano, the Trump government might be purposefully bringing down markets in order to force the Federal Reserve to lower rates. The idea holds that rate reductions are crucial for controlling U.S. debt given market volatility, which includes notable drops in stocks and cryptocurrencies. Trump’s remarks notwithstanding, the Fed is still reluctant to lower rates given inflation issues.