Donald and Melania Trump crypto tokens plummet

(WASHINGTON) — President Donald Trump on Thursday said he will call for a lowering of U.S. interest rates, exerting pressure on the Federal Reserve despite a longstanding norm of political independence at the central bank.

During a virtual address to the World Economic Forum in Davos, Switzerland, Trump demanded a drop in interest rates after calling for a reduction of oil prices set by a group of nations known as OPEC, which includes Saudi Arabia.

The prospect of low oil prices will enable the Fed to dial back its fight against inflation and bring down interest rates, Trump said.

“I’m going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said, later adding: “With oil prices going down, I’ll demand that interest rates drop immediately.”

The U.S. does not belong to OPEC, nor does the president play a role in the organization’s decisions regarding the price of oil sold by its member states.

The central bank is typically insulated from political interference, but several past presidents have sought to influence the Fed’s interest rate policy, including Trump, who repeatedly spoke out in favor of low interest rates during his first term.

On the campaign trail in August, Trump said a U.S. president should have a role in setting interest rates.

Fed Chair Jerome Powell struck a defiant tone in November when posed with the question of whether he would resign from his position if asked by Trump.

“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.

When asked whether Trump could fire or demote him, Powell retorted: “Not permitted under the law.”

The prospect of a presidential role in setting interest rates drew opposition from both liberal and conservative economists who previously spoke to ABC News.

Critics of an expanded role for the president point to a bout of high inflation in the 1970s and 1980s. Before the inflation took hold, President Richard Nixon had urged Fed Chair Arthur Burns to cut rates in the run-up to the 1972 presidential election.

Nixon’s advocacy is widely viewed as a contributing factor for lower-than-necessary interest rates that enabled inflation to get out of control, some economists noted.

“Allowing the president, any president, to help set monetary policy would eventually wreck the U.S. economy,” Mark Zandi, chief economist at Moody’s Analytics, told ABC News.

The statements from Trump on Thursday came amid a monthslong reduction in interest rates.

The Fed cut interest rates by a total of a percentage point over the final months of 2024, delivering relief for borrowers long-saddled by a prolonged stretch of high interest rates.

The central bank, however, has indicated that it may cut rates less often in 2025 than it previously indicated. Inflation may prove more difficult to bring under control than policymakers thought just a few months ago, according to the bank.

The Fed is set to make its next decision on interest rates next week. The central bank is widely expected to maintain interest rates at the current level of between 4.25% and 4.5%, according to the CME FedWatch Tool, a measure of market sentiment.

Speaking on Thursday, Trump said a lowering of rates could bring about a reduction of interest rates worldwide.

“They should drop all over the world,” Trump said. “They should follow us.”

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — President Donald Trump’s tariffs sent stocks tumbling in recent weeks, but the uncertainty helped propel a different asset viewed as a safe haven: gold.

The price of gold topped $3,000 per ounce for the first time ever last week, and the precious metal continued to hover around that mark in early trading on Monday.

Gold prices have soared 12% so far this year, while the S&P 500 has plummeted nearly 7%. Over that period, the Dow Jones Industrial Average has dropped 2% and the tech-heavy Nasdaq has tumbled 8.5%.

The rush toward gold makes financial sense, experts said. The asset offers investors a hedge against uncertain stock performance, since gold prices often display a degree of independence from movements in equities markets.

However, gold prices carry volatility of their own, some experts added, especially when buyers enter the market at a high point, risking losses instead of providing a security blanket.
“Investors need to be careful,” Campbell Harvey, a professor at Duke’s Fuqua School of Business who studies commodity prices, told ABC News.

“At a time of heightened uncertainty, people look toward a safe haven – and gold is a perceived safe haven. But most people don’t realize that gold is volatile,” Harvey added.

The run-up in gold prices comes amid a market slump set off by an escalating global trade war.

Last week, the S&P 500 closed down more than 10% since its high in February, meaning the decline officially qualified as a market correction. It marked the index’s first correction since October 2023. At the same time, the Dow suffered its worst one-week drop-off since 2023.

“Right now, it’s a very anxious marketplace,” Jim Wyckoff, senior market analyst at Kitco Metals, told ABC News. “That’s been a detriment for stock-market bulls and a boom for gold-market bulls.”

The flight to gold in moments of market crisis draws on decades of evidence, according to an analysis co-authored by Harvey in 2020. The price of gold moved higher during seven of the last nine major stock market selloffs stretching back to the late 1980s, researchers found.

“It’s a good track record, but it’s not a sure thing,” Harvey said. “Even though it went up seven out of nine of these drawdown periods, that doesn’t mean it will be seven out of nine in the next nine drawdowns.”

Last week, Paris-based financial firm BNP Paribas raised its forecast for gold prices, predicting the precious metal would exceed $3,100 an ounce. The company attributed the rosy outlook to economic uncertainty incited by Trump, but it warned such gains would likely fizzle out by the second half of this year.

“The gold market will price in or normalize Trump-driven trade risks, as it typically does with geopolitical risk,” BNP Paribas said in a report shared with ABC News. “Thus, if there is no ongoing escalation in trade tensions, gold prices will, in our view, struggle to maintain further upside momentum.”

Some experts who spoke to ABC News acknowledged the current price boom may eventually lose steam, but they still encouraged investors to add the precious metal to their portfolios as a means of offsetting the heightened risk of stocks.

“Gold offers diversification,” Trevor Yates, an analyst at investment firm Global X, told ABC News. “We see gold warranting a place in the portfolio.”

Investors who add gold for the sake of diversifying their portfolio, however, may want to add other assets alongside it, such as Treasury bonds or real estate, Harvey said.

“There are other safe assets besides gold,” Harvey said. “Don’t put all of your eggs in one basket.”

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — The Federal Reserve is set to announce its first interest rate decision since a global trade war touched off by President Donald Trump’s tariffs sent stocks reeling and triggered concern about a possible recession.

The move arrives less than two weeks after Fed Chair Jerome Powell said tariffs would likely raise prices, while voicing patience as Trump’s economic policies take shape.

“We are focused on parsing the signal from the noise as the situation evolves,” Powell told an economic forum in New York City. “We are not in a hurry.”

Investors expect the central bank to leave rates unchanged on Wednesday, according to the CME FedWatch Tool, a measure of market sentiment.

The Trump administration earlier this month slapped 25% tariffs on goods from Mexico and Canada, though the White House soon imposed a one-month delay for some of the tariffs. A fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China a month prior.

Tariffs imposed on steel and aluminum last week triggered retaliatory tariffs from Canada and the European Union, adding to countermeasures already initiated by China.

Last week, the S&P 500 closed down more than 10% since a peak attained last month, meaning the decline officially qualified as a market correction. It marked the index’s first correction since October 2023. The Dow Jones Industrial Average suffered its worst one-week drop since March 2023.

By some key measures, the economy remains in solid shape, however. A recent jobs report showed steady hiring last month and a historically low unemployment rate. Inflation stands well below a peak attained in 2022, though price increases register nearly a percentage point higher than the Fed’s goal of 2%.

The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point. Still, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.

Stretching back to his first term in office, Trump has repeatedly urged the Fed to lower interest rates.

During a virtual address to the World Economic Forum in Davos, Switzerland, in January, Trump called on the central bank to cut rates days before it was set to announce an interest rate decision.

At the ensuing meeting that month, the Fed decided to hold interest rates steady. Speaking at a press conference in Washington, D.C., after the announcement, Powell declined to comment about Trump’s call for lower interest rates, saying it would be “inappropriate” to respond.

“The public should be confident that we’ll continue to do our work as we always have,” Powell said, adding that the Fed would continue to “use our tools to achieve our goals.”

Copyright © 2025, ABC Audio. All rights reserved.