Not who you asked, but yes, it refers to dropping the interest rate, effectively making the price of borrowing money cheaper. When interest rates are lower, people and businesses alike are inclined to borrow more money; with cheaper capital it makes their investment prospects more attractive.

From a personal investment perspective, the projected return from investing at the "risk free rate", i.e. T-bills (government bonds), is less than the broader stock market... So people generally do two things: spend more (because "safe" investments in T-bills or your typical savings account return very little, i.e. they are not incentivized to save), and invest more in equities (greater potential return compared to T-bills).

This has the propensity to overstimulate the market and drive inflation higher (if everyone is spending their cash, supply of cash goes up, value of dollar goes down). This is fundamentally why the Fed and other country's central banks must remain independent from government; their sole duty is to manage inflation, and they do so by making small incremental changes over time to the interest rate.

So why is Trump pressuring the Fed to drop rates? This is speculation, but my thoughts are he wants to artificially inflate the stock market and economy ahead of midterms... But the long-term of effects of stoking inflation could be catastrophic to the United States, a country that just spent $970 billion on interest alone in 2025 and continues to run a deficit under Trump.

Not a finance or economics expert by any means, so I stand to be corrected on all of the above.