Trump demands 1% interest rates, analysts warn of economic fallout

Hours after the Federal Reserve nudged interest rates higher on September 16, President Trump took to Truth Social to demand the central bank slash its benchmark rate to 1% or less. The Fed had just raised the federal funds rate by 25 basis points to a target range of 3.75% to 4%. Trump’s response was, roughly translated: go the other direction, and fast. Economists and market analysts did not mince words. Multiple commentators described a rate cut of that magnitude as “disastrous,” warning it could destabilize bond markets, spike long-term borrowing costs, and reignite inflation that’s already running above the Fed’s 2% target. What Trump wants vs. what the Fed is doing The gap between presidential desire and central bank reality is enormous. Trump wants rates at 1% or lower. The Fed’s own projections peg the median federal funds rate at 4.1% through the end of 2026 and into 2027. This isn’t a new fixation. Trump has been publicly lobbying for a 1% rate, or something in that neighborhood, repeatedly since early 2025. He made similar calls in June 2026 and again in September. Each time, his argument leans on the same pillars: America’s creditworthiness is strong, the economy has ro...