Trump’s Handwritten Note to Powell Sparks Rate Cut Debate: Is a 1% Shift Realistic?

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In a moment that has taken financial circles by storm, former U.S. President Donald Trump has reignited tensions with Federal Reserve Chair Jerome Powell by issuing a handwritten note directly criticizing current monetary policy and calling for immediate and aggressive rate cuts. The note, penned directly on a global interest rate chart, has gone viral under the tag “Trump Powell rate cut note,” drawing sharp reactions from markets, policymakers, and analysts worldwide.

The Handwritten Note: A Direct Challenge to Powell

Trump’s note, concise yet pointed, reads:

“Jerome — You are, as usual, too late. You have cost the USA a fortune—and continue to do so. You should lower the rate—by a lot! Hundreds of billions of dollars of opportunity & growth lost! No inflation!”

The former president’s choice of medium—a printed chart showcasing global interest rates—was strategic. It highlighted the disparity between U.S. rates, currently at 4.5%, and those of nations such as Switzerland (0.25%) and Japan (0.1%), implying the Federal Reserve’s stance is not only outdated but economically damaging. Trump’s handwritten message has now become a focal point across financial media under “Trump news today.”

Source: The Kobeissi Letter Official X Account

Why Trump’s Note Matters

Beyond the viral image, the note reveals a deeper strategic move. Trump has not hidden his dissatisfaction with Powell’s approach to interest rates, and reports suggest he is actively interviewing candidates to replace the current Fed Chair when his term expires in May 2026. This fuels growing speculation regarding a “Trump Powell termination” scenario, with potential ripple effects across monetary policy and financial markets.

While the Federal Reserve operates as an independent entity, Trump’s vocal criticism and history of public confrontations with Powell signal that, if returned to office, he may pursue aggressive measures to align Fed policy with his economic vision, potentially including a significant rate cut to stimulate growth.

Market Reactions: Crypto and Equities Bounce

Interestingly, the handwritten note’s publication coincided with a mild reversal in crypto and equity markets. Bitcoin and Ethereum, which had been trending downward earlier in the day, saw an uptick of around 0.65% following the note’s circulation. This market response underscores investor hopes that even the discussion of a potential 1% rate cut could translate into future liquidity easing, benefiting risk assets.

Lower interest rates typically drive capital away from bonds and toward riskier assets such as tech stocks and cryptocurrencies. As a result, the “rate cut crypto impact” is tangible, with traders recalibrating positions in anticipation of a potentially looser monetary environment.

Can Trump Force a 1% Rate Cut?

Despite the excitement generated by the handwritten note, analysts are urging caution. One prominent crypto market strategist, Alva, noted on X:

“Chance of yield hitting 1% is low unless we see a Fed leadership shakeup or a severe economic shock.”

Experts emphasize the Federal Reserve’s independence and warn that significant rate shifts, especially to the magnitude of 1%, would require either a dramatic change in leadership or an economic downturn that forces the Fed’s hand. Additionally, current inflation metrics, while easing, remain above the Fed’s 2% target, complicating the case for aggressive rate reductions in the near term.

Behind the Note: A Political Strategy

The Trump Powell note is not an isolated event but part of a broader political narrative. Trump’s public criticism of Powell aligns with his long-standing contention that high interest rates stifle growth, increase borrowing costs for businesses, and hinder the American economy’s full potential.

Source: X

His call for aggressive cuts is consistent with his pro-growth, low-rate stance during his presidency. The note is a symbolic reminder to his base and financial markets that Trump intends to prioritize economic expansion if he returns to office.

The Kobeissi Letter and the 1% Rate Cut Theory

Adding to the speculation is the recent analysis from The Kobeissi Letter, which suggested that a 1% rate cut could be on the table under the right conditions. While the likelihood remains low under current leadership, the analysis points to the possibility of a substantial pivot should leadership changes occur or if economic indicators deteriorate significantly.

Historical Context: Trump vs. Powell

This is not the first time Trump has directly challenged Powell. During his presidency, Trump frequently criticized the Fed Chair for raising interest rates, arguing it undermined the administration’s economic agenda. In 2019, Trump even discussed demoting Powell within the Fed, illustrating his willingness to confront institutional norms in pursuit of policy alignment.

The latest handwritten note thus follows a pattern, reaffirming Trump’s stance while increasing public pressure on the Federal Reserve.

What Happens if the Rate Cut Materializes?

If the Fed were to adopt a 1% rate cut under political pressure or economic necessity, the impact on financial markets would be immediate and significant:

Crypto Market Surge: Lower rates typically reduce the attractiveness of bonds, encouraging investment in higher-yielding assets such as cryptocurrencies.
Stock Market Rally: Equities would likely benefit from lower borrowing costs and increased liquidity, with growth sectors seeing particular strength.
Bond Market Shifts: Yields would decline, pushing prices higher in the short term.
Dollar Weakness: The U.S. dollar could face downward pressure, boosting commodity prices and exports.

However, it is essential to note that such a cut would not occur in a vacuum. It would likely be a response to economic stress, which could create its own challenges for markets and investors.

The Path Ahead: Uncertain but Watchful

The Trump Powell rate cut note has introduced a new narrative into the financial landscape, blending politics with monetary policy in a way only Trump can. While the immediate likelihood of a 1% cut remains slim, the note has shifted the conversation, forcing markets to consider scenarios that were previously seen as unlikely.

Investors should monitor key indicators:

Statements from the Federal Reserve regarding future policy directions.
Inflation and employment data, which could influence rate decisions.
Political developments, particularly Trump’s positioning ahead of the 2026 Fed chair transition.

Final Word: More Than Just a Note

Ultimately, Trump’s handwritten note to Powell is more than just a piece of paper—it is a strategic message to markets, policymakers, and voters. It highlights the ongoing tension between fiscal ambitions and monetary independence and signals potential volatility ahead as politics and policy collide.

For now, the best course of action for investors is to stay informed, watch key support and resistance levels in crypto and equity markets, and remain prepared for both opportunities and risks as this narrative unfolds.

Writer @Ellena
Ellena is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

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