Is Trump really asking for emergency level rates right now?

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Trump is asked where he wants interest rates to be next year. His response: “1% and maybe lower than that.”

Trump is effectively asking to put the economy into emergency mode when we aren’t actually in an emergency.

By demanding interest rates drop to 1%, he wants to make borrowing money nearly free, which changes the entire game for investors.

When rates are that low, keeping cash in a savings account becomes pointless because it earns you nothing, so everyone is forced to take that cash and dump it into things like stocks, real estate, and crypto to find a return.

However, if money becomes free again, cash becomes trash and the value of assets generally skyrockets because there is simply nowhere else for the capital to go.

For your investment portfolio, it would likely trigger a massive melt-up where prices hit all-time highs, but for the actual economy, it’s a huge risk.

Rates of 1% are usually reserved for crises to keep the system alive, using them when the economy is stable is like injecting adrenaline into someone who is already running a marathon.

It creates a temporary boom that feels amazing, but it almost guarantees we see inflation spike back up for regular things like food and rent, eventually forcing the Fed to slam the brakes even harder later on.

It’s the ultimate short term party that risks a long term hangover.