USD Under Pressure: Trump Demands 1% Rates from Powell

The US dollar faces renewed political pressure as President Trump publicly criticized Fed Chair Jerome Powell on Truth Social, demanding interest rates be lowered to 1%. Trump labeled Powell as 'Too Late' and stated the entire Federal Reserve Board should be ashamed of maintaining current rate levels. The aggressive rhetoric signals potential intensified political interference in monetary policy decisions ahead. Markets are watching for any Fed response or shift in policy stance, though the central bank has historically maintained independence from political influence. The dollar index showed minor weakness following the comments, trading down 0.1% as traders assess the implications. This development adds uncertainty to the Fed's rate trajectory, with markets currently pricing in potential rate cuts later in 2025. Continued political pressure could complicate the Fed's inflation-fighting efforts and impact dollar strength across major pairs.