The Trump administration could be deliberately fueling uncertainty in the stock market to pressure Federal Reserve Chair Jerome Powell into reducing interest rates, according to a financial analyst.
This tactic might help the U.S. government avoid refinancing approximately $7 trillion in national debt over the coming months, Bitcoin analyst Anthony Pompliano suggested in a March 10 post on X.
President Donald Trump and Treasury Secretary Scott Bessent are “actively driving down asset prices in an effort to push Jerome Powell to lower rates,” said Pompliano, founder and CEO of Professional Capital Management and host of The Pomp Podcast.
https://twitter.com/APompliano/status/1899154245783359849
In January, Powell stated that the Federal Reserve would not cut interest rates from the current target range of 4.25% to 4.5%, despite pressure from Trump to do so.
Pompliano argues that Trump’s recent tariff policies have contributed to market instability, creating conditions favorable for the bond market while simultaneously decreasing the 10-year Treasury yield.
The 10-year Treasury yield, which stood near 4.8% in January, has since dropped to 4.21%, signaling that Trump’s presumed approach is yielding results, Pompliano claims.
Regardless of whether this theory holds, financial markets have been struggling, with cryptocurrency experiencing even steeper losses.
On March 10 alone, the State Street Standard & Poor’s 500 index fund (SPY) fell 2.66%, while the Nasdaq-100 tumbled 3.8%, according to Google Finance data. Over the past month, these indexes have declined by 7.32% and 10.7%, respectively. Meanwhile, Bitcoin has plummeted 27.4% from its record high of $108,786, with over $1.2 trillion in cryptocurrency market capitalization erased since Dec. 17.
If the downturn persists, the standoff between Trump and Powell could become a game of “who blinks first,” Pompliano said.
While Trump has not explicitly admitted to such a strategy, he hinted at its potential benefits during a March 9 interview on Fox News, stating, “Nobody ever gets rich when interest rates are high because people can’t borrow money.”
Pompliano also emphasized that lower interest rates would provide significant relief to American consumers:
“The primary goal is to drive rates lower, enabling greater economic activity through easier access to capital. When people have access to cheap money, they put it to use.”
The CME FedWatch tool, which tracks expectations for Federal Reserve interest rate decisions, indicates a 96% probability that rates will stay between 4.25% and 4.50% following the Fed’s March 19 meeting. However, it suggests nearly even odds that rates could be lowered at the next meeting on May 7.
The Federal Reserve generally resists cutting interest rates when inflation remains high, as controlling price stability is one of its key mandates.
Nevertheless, if Trump’s policies trigger a recession—dubbed a “Trumpcession” by some—it may leave the Fed with little choice but to reduce rates.
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