Trump’s Remark That ‘Fed Rate’ Is 300 Points Too High Sparks Bitcoin Price Surge

Bitcoin Rises as Trump Calls for Major Fed Rate Cut

Bitcoin gained ground on July 9, climbing to $109,343—an increase of 0.8% in 24 hours—after former President Donald Trump called for a sharp reduction in U.S. interest rates, according to CoinDesk Research’s technical analysis.

The rally was sparked by a post Trump made on Truth Social at 10:00 a.m. ET, where he stated that the federal funds rate is “at least 3 points too high.” He argued that failing to lower rates by 300 basis points (3%) is costing the U.S. economy $360 billion annually in refinancing costs. Bitcoin prices began rising within 30 minutes of his statement, as traders anticipated looser monetary policy and a more favorable environment for risk assets.

Macro analysts at The Kobeissi Letter published a detailed breakdown on X, analyzing Trump’s figures. They noted that over the past year, the U.S. has paid $1.2 trillion in interest—equivalent to about $3.3 billion each day. While Trump suggested savings of $360 billion per percentage point on $36 trillion of debt, Kobeissi’s team clarified that only about $29 trillion of that debt is publicly held and sensitive to rate changes. Using more conservative estimates, they projected that a 300 bps cut, rolled out gradually, could reduce annual interest costs by roughly $174 billion in the first year, potentially adding up to $2.5 trillion in savings over five years if 20% of the debt were refinanced each year.

However, The Kobeissi Letter warned that cutting rates by 300 basis points would be an extraordinary move with far-reaching consequences. Historically, even during crises like 2008 or the pandemic, single cuts have not exceeded 100 basis points. Such an aggressive cut, especially while the economy is growing at 3.8% annually, would be unprecedented.

Their analysis indicated that a rate drop of this magnitude could push inflation back above 5%, weaken the U.S. dollar by over 10%, and drive housing prices higher as mortgages become more affordable. In the short term, markets might see significant rallies, with gold potentially reaching $5,000 per ounce, oil exceeding $80 per barrel, and the S&P 500 possibly surging past 7,000. Yet without major cuts in government spending, the long-term risks could be substantial.

For Bitcoin, the implications could be significant. A rapid decrease in interest rates would be seen as a form of monetary stimulus, potentially attracting capital into alternative assets like BTC as investors seek protection against inflation and currency devaluation. Although the likelihood of such a dramatic cut remains uncertain, Bitcoin’s swift reaction suggests traders are already factoring in the possibility of further upside.

Technical Analysis Highlights:

Bitcoin’s price began climbing within half an hour of Trump’s Truth Social post.
Prior to the comments, BTC had been consolidating, but buying activity picked up sharply afterward.
The token tested resistance near $109,761 and formed higher lows above $108,500, indicating bullish momentum.
Bollinger Bands tightened to their narrowest range in this cycle, signaling a potential breakout.
Trading volume near support zones around $108,500–$108,600 suggested institutional buying.