Bitcoin Moves Higher as Trump Slams Fed Policy, Calls for 300 Basis Point Cut
Bitcoin climbed to $109,343 on July 9, posting a 0.8% daily gain after former U.S. President Donald Trump called for an aggressive interest rate cut. According to technical analysis from CoinDesk Research, the move reflects shifting market sentiment toward potential monetary easing.
Trump’s remarks, posted at 10:00 a.m. ET on Truth Social, claimed that the U.S. federal funds rate is “at least 3 points too high.” He argued that keeping rates elevated is costing the economy an estimated $360 billion annually in refinancing burdens. Within 30 minutes of the post, Bitcoin began trending upward, with traders interpreting the statement as a signal for potential policy shifts that could boost liquidity and risk appetite.
A detailed analysis from The Kobeissi Letter broke down Trump’s estimate. They noted the U.S. has paid $1.2 trillion in interest over the past year—equivalent to roughly $3.3 billion daily. While Trump’s numbers were based on $36 trillion in total U.S. debt, Kobeissi clarified that about $29 trillion is actually publicly held and sensitive to rate changes. A gradual 300 basis point rate cut could, under more conservative assumptions, result in $174 billion in savings in the first year and up to $2.5 trillion over five years, assuming 20% of debt is refinanced annually.
Still, the analysts warned that a cut of this scale would be highly unusual. Even during the 2008 financial crisis and the 2020 COVID shock, the Federal Reserve never executed a single cut larger than 100 basis points. Implementing a 300 bps reduction amid 3.8% GDP growth would break historical precedent and come with serious risks.
Such a move could reignite inflation above 5%, weaken the dollar by over 10%, and drive housing prices higher due to lower mortgage costs. In the short term, markets could rally, with projections including gold surging to $5,000/oz, oil climbing past $80 per barrel, and the S&P 500 potentially crossing 7,000. But longer-term, the economic impact would be deeply tied to whether fiscal discipline follows.
For Bitcoin, however, the implications are bullish. A rate cut of this magnitude would be viewed as major stimulus—supporting hard assets and alternative stores of value. As investors look to hedge against inflation and currency debasement, BTC could become a key beneficiary.
Technical Summary:
- Bitcoin’s rally began within 30 minutes of Trump’s post.
- Prior consolidation gave way to a move toward $109,761 resistance, with higher lows forming above $108,500.
- Bollinger Bands compressed to their tightest range in the current cycle—typically a signal of imminent breakout.
- Volume surged near key support zones around $108,500–$108,600, indicating possible institutional accumulation.
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