Trump's 1% Rate Demand Seen as Unrealistic as Inflation Persists Ahead of Midterms

President Donald Trump is pressing the Federal Reserve to cut its policy rate to 1% from the current 3.75%-4% range, a demand analysts say is impractical and would likely backfire by driving Treasury yields higher and weakening the dollar. A 3-percentage-point cut "seems cataclysmic," said J. Benson Durham of DASM investment research. A White House ally who liaises with Fed Chair Kevin Warsh said the 1% calls are unrealistic given global bond market dynamics. The Fed raised rates unanimously on September 16, 2026, its first hike in three years, with Warsh citing price stability. The Fed's preferred inflation gauge was 3.7% in July 2026 and is not expected to reach the 2% target before 2029. Trump has largely spared Warsh from criticism while targeting other policymakers, including efforts to oust Governor Lisa Cook. A Reuters/Ipsos poll published September 21 showed only 17% approve of Trump's handling of cost-of-living issues.