The post President Trump’s D.O.G.E will force the Fed to cut interest rates appeared on BitcoinEthereumNews.com.

Mr. Donald Trump has officially found a way to strong-arm the Federal Reserve into cutting interest rates. Not through direct intervention, but through fiscal policy. The US president’s Department of Government Efficiency (D.O.G.E) is on a mission for massive spending cuts and federal layoffs, and economists generally agree it will slow down the economy, giving the Fed no choice but to lower rates. It’s actually the perfect setup if you think about it whether Fed Chair Jerome Powell likes it or not. Moving on, monetary policy and fiscal policy are moving in opposite directions right now. The Fed hiked rates aggressively from March 2022 until November 2024 in efforts to fight inflation, which took the rates up over 5 percentage points in just a year, the largest in 50 years. Meanwhile, the federal government (under former president Joe Biden) racked up a $4.2 trillion deficit from 2022-2024. Now with Trump back in office trying to cut $2 trillion in govt spending, the entire game is likely gonna flip. Trump could easily force the Fed’s hand Now, the US Treasury Secretary, Scott Bessent, says Trump wants to bring the deficit down to 3% of GDP. That would require massive cuts from labor, whether the economy is ready for it or not. Consumer sentiment dropped for the first time in six months in January. The Bloomberg US Financial Conditions Index fell 37% in just two weeks, and the Atlanta Fed cut its GDP growth estimate in half, from 4% to 2.3% in just a month. The 10-year Treasury yield fell 50 basis points, heading toward a very dangerous recession signal. If the US economy slows down too much, the Fed will have to cut rates. There’s no getting around it. The latest core personal consumption expenditures (PCE) report, the Fed’s preferred inflation…

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Filed under: News - @ February 28, 2025 5:28 pm