Trump Advocates for Rate Cuts in Detroit Address

Trump argued that lowering rates during periods of market strength would unlock faster growth, pointing to his ambition for equities to rise another 20–25%. He framed this as a return to an older pro-growth playbook, contrasting it with what he described as an overly cautious modern Fed. Inflation, currently running at 2.7% year over year, was downplayed by Trump, who claimed recent policy actions had already brought price pressures under control.

The remarks also carried a political edge. Trump openly criticized Jerome Powell and signaled plans to appoint a new Fed chair in May 2026 who would be more aligned with rate cuts during favorable market conditions.

Rate Cuts, Inflation, and the Broader Policy Backdrop

Trump’s comments build on a broader post-election agenda following his 2025 re-election. Since returning to office, he has promoted aggressive pro-growth measures, including tariffs projected to generate over $600 billion for stimulus checks, a proposed 10% cap on credit card interest rates, and restrictions on institutional purchases of single-family homes.

This stance is not new. During his first term, Trump repeatedly pressured the Fed to lower rates, particularly in 2018–2019. That period saw equities surge and Bitcoin rally sharply amid expanding global liquidity. Crypto sentiment ahead of the Detroit speech reflected similar expectations, with traders highlighting rate cuts as a potential tailwind for Bitcoin and other risk assets.

However, history also shows the trade-off. Expansionary policy later contributed to inflation, forcing aggressive tightening cycles that reversed earlier gains.

What To Watch Next?

Attention now shifts to several key milestones after Trump asking for rate cuts. The next Federal Reserve meeting in late January 2026 could offer early signals on rate direction, while the nomination of a new Fed chair by May may confirm whether aggressive cuts are likely. February’s Q1 inflation report will be critical in assessing whether tariffs are reigniting price pressures.

On the policy front, markets are watching congressional votes on tariff-funded stimulus packages and Trump’s upcoming healthcare affordability framework, which may include financial and crypto-related reforms. Key risks include inflation pushing above 3%, which could force policy reversals and dampen bullish sentiment. Global factors, such as escalating trade tensions or funding stress in the AI sector, could also shift focus away from U.S. markets.