Sean Williams, The Motley Fool
Statistically, Wall Street has enjoyed having Donald Trump in the White House. Even though some of the stock market’s highest-volatility events have occurred under President Trump (e.g., the COVID-19 crash in February-March 2020 and tariff tantrum in April 2025), the average annual return of the iconic Dow Jones Industrial Average (DJINDICES:^DJI), broad-based S&P 500 (SNPINDEX:^GSPC), and innovation-driven Nasdaq Composite (NASDAQINDEX:^IXIC) are higher under Trump than under most other presidents.
However, the bull market that’s thrived under President Trump is at risk of being upended by the start of only the fourth rate-hiking cycle of the 21st century.
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President Trump has repeatedly called on the Fed to slash interest rates. Image source: Official White House Photo by Andrea Hanks, courtesy of the National Archives.
President Trump has been critical of the FOMC for raising interest rates
On Sept. 16, Fed Chair Kevin Warsh and 11 other voting Federal Open Market Committee (FOMC) members raised the federal funds target rate by 25 basis points to 3.75%-4.00%. President Trump’s handpicked successor to Jerome Powell has repeatedly said that inflation is too high and that the Fed will “deliver price stability.”
But President Trump sees things differently. He recently told reporters that:
I’m relying on Kevin [Warsh], but he’s got, you know, a very tough board. He’s got a board that was put there by a lot of other people. And the interest rates are too high, they’re not appropriate.
Criticizing the central bank isn’t new for the president. Since the beginning of his second non-consecutive term, he was critical of now-former Fed Chair Jerome Powell and the FOMC for not slashing interest rates. For added context, the FOMC did lower the federal funds target rate six times between September 2024 and December 2025, but not quickly enough for the president’s liking.
Trump has repeatedly argued that interest rates should be lowered to 1% or below and has admonished the central bank for hindering America’s growth potential.
While it’s possible that lower interest rates could fuel America’s economy, the bond market believes that would be a terrible idea.
The bond market has a two-word message for President Trump: You’re wrong
