Core Viewpoint - President Trump's push for the Federal Reserve to lower the policy interest rate to 1% has sparked widespread attention and controversy, revealing complex underlying factors that indicate the impracticality of this proposal [2][6]. Group 1: Debt Pressure and Economic Stimulus - Trump's primary motivation for advocating a rate cut is to alleviate the heavy debt burden on the U.S. government, which incurs over $600 billion annually in interest payments. He believes that a 1% rate could save $360 billion in refinancing costs each year [2]. - The administration aims to stimulate the economy through lower interest rates, as current tariff policies have negatively impacted consumers, leading to a weakened domestic market and increased inflationary pressures [2]. Group 2: Federal Reserve's Responsibilities and Policy Logic - The Federal Reserve's dual mandate is to maintain low inflation and strong employment, which Trump's proposal deviates from. Economists argue that only by achieving these goals can borrowing costs stabilize in the long term [3]. - Current inflation in the U.S. is manageable, and a sudden drop to 1% could trigger uncontrollable inflation, harming the purchasing power and quality of life for ordinary citizens [3]. Group 3: Historical Context and Market Dynamics - Historical patterns show that the Federal Reserve adjusts rates cautiously, typically only considering significant cuts during crises, as seen in the gradual rate reductions during the 2008 financial crisis [5]. - A rapid reduction to 1% could disrupt market expectations, leading to excessive speculation in the stock market and distorting the bond market yield curve, increasing systemic risks in the financial system [5]. Group 4: Global Economic Implications - A major shift in U.S. interest rates would have widespread spillover effects on the global economy, potentially undermining the dollar's international standing and leading to a sell-off of dollar assets [5]. - Other countries may feel compelled to follow suit with rate cuts to stabilize their economies and currencies, potentially igniting a global interest rate war and disrupting the global financial order [5].