Trump Presses for Rate Cuts During Fed Emergency Meeting

The U.S. Federal Reserve convened a closed-door emergency meeting Monday, allowing the Board to address confidential matters under existing regulations.

At the start of the week, President Donald Trump renewed his call for interest rate cuts, coinciding with the Fed’s unexpected announcement of the emergency session.

The Message of Trump

Trump defended his recent actions, stating: “Oil prices are down, interest rates are down, food prices are down, there’s no inflation, and the U.S.—abused for so long—is now collecting billions each week from abusive countries through tariffs already in place. The slow-moving Federal Reserve should cut rates!”

He added: “Even as China—the biggest abuser—raises tariffs by 34%, on top of its already ridiculously high long-term rates (and more!), ignoring my warning not to retaliate, their markets are crashing. They’ve taken advantage of good old America for decades! Our past ‘leaders’ let this happen. Let’s Make America Great Again!”

Traders ramped up expectations for an emergency rate cut by the Fed, even pricing in a possible move before the central bank’s next scheduled meeting, as fears of a global recession grow due to the latest U.S. tariffs.

The Fed noted: “A closed meeting of the Board of Governors of the Federal Reserve System is scheduled for Monday, April 7, 2025, at 11:30 a.m., following established procedures.”

Bond Market Predictions

At one point, markets briefly priced in 125 basis points of rate cuts before year-end — the equivalent of five quarter-point reductions — according to overnight interest rate swaps. Although traders later scaled back those bets, the shift was dramatic: as of last week, only three cuts had been fully priced in.

Swaps also indicate there’s now nearly a 40% chance the Fed could lower its benchmark rate by 25 basis points as soon as next week, well ahead of its next scheduled policy decision on May 7.

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.