‘Stocks will 2X in 2 3 Years, Real Estate to Double’: Investment expert predicts impact of US rate cut to 1%

US President Donald Trump has renewed his demand for the Federal Reserve to slash interest rates dramatically, insisting that rates should fall to just 1 per cent. Trump argues that significantly cheaper borrowing costs would turbocharge economic growth and fortify the U.S. economy. His remarks come shortly after the Federal Reserve chose to maintain its key interest rate between 4.25 per cent and 4.50 per cent—a level designed to curb inflation while supporting steady economic expansion.

Investment expert Akshat Shrivastava weighed in on the potential fallout, offering a stark prediction for the years ahead.

“Stocks will 2X over the next 2-3 years. Real estate will 2X over the next 2-3 years. And inflation will also 2X over the next 2-3 years,” Shrivastava said.

The call for a drastic reduction in interest rates to 1% by US President Donald Trump has intensified discussions on monetary policy. Trump asserts that lowering rates would boost economic growth and strengthen the economy. This demand follows the Federal Reserve’s decision to keep the key interest rate steady between 4.25% and 4.50%, aimed at controlling inflation while maintaining economic expansion. “The Fed is acting too slowly, and it’s costing America economic momentum,” Trump remarked.

Shrivastava warns that if inflation doubles, it would severely impact those with lower incomes, stating, “People who are living hand to mouth or simply saving in government schemes would get hit the most.” He further explained that basic costs like food, rent, and fuel would become significantly more expensive, eroding the value of savings and low-yield investments. This scenario poses a risk of creating financial strain on ordinary citizens.

While the potential rise in asset prices might appear beneficial to some, Shrivastava cautions that it often exacerbates wealth inequality. “Rising asset values make the wealthy richer, while the middle class and lower-income groups struggle to keep up with higher living costs,” he noted. Such trends could widen the gap between income groups if not managed carefully.

The Federal Reserve remains cautious, balancing the need to curb inflation with sustaining post-pandemic recovery efforts. Experts have said markets thrive on certainty. when political leaders openly attack central bankers, it creates confusion about future policy directions. This uncertainty can leave financial markets vulnerable, affecting global economic stability.

Despite the political pressure, the potential fallout of quickly reduced interest rates includes the risk of inflating asset bubbles. 

Trump has repeatedly criticised the Federal Reserve chair for maintaining interest rates higher than he would prefer, arguing they should be lowered to boost economic growth. Traditionally, Fed chairs have been protected from presidential dismissal except in cases of malfeasance or misconduct. However, Trump has often threatened to challenge that legal boundary, hinting at firing Jerome Powell during his presidency.

Recently, the Federal Reserve decided to keep interest rates steady between 4.25% and 4.50%, a level aimed at controlling inflation while supporting economic stability.

Trump’s clashes with the Federal Reserve date back to his time in office, where he consistently tested the boundaries of the Fed’s independence. Despite lacking the legal authority to remove a Fed chair without cause, Trump repeatedly questioned this norm, openly suggesting he might defy the precedent to exert influence over monetary policy.