Mark Cuban Says Trump Is Trying To ‘Thread the Needle’ and Create ‘UBI for Asset Owners’ by Dropping Rates to 1%, But He Is Worried a Lot ‘Can Go Wrong’

Billionaire entrepreneur Mark Cuban sounded the alarm on economic policy and Federal Reserve strategy in a recent post on Bluesky, warning that efforts to cut interest rates could create a “UBI (universal basic income) for asset owners” while simultaneously destabilizing the broader economy.

Cuban’s comments come at a pivotal moment in American economic and political history. With the 2024 election cycle behind us and a new administration shaping policy, the Federal Reserve faces mounting pressure to lower interest rates. While investors and businesses anticipate rate cuts as a boon for growth, Cuban warns that the path forward is fraught with risk.

The Bet on Lower Rates

Cuban outlined a scenario in which dropping interest rates to as low as 1% would unleash a flurry of cheap borrowing. Homebuyers would benefit from lower mortgage rates, businesses could finance expansion more affordably, and capital would flow more easily into investments. More significantly, Cuban highlights the potential upside for venture capitalists, private equity firms, and corporate executives, who would see their valuations soar as the cost of capital decreases.

In his words, a sharp rate cut would be akin to a “UBI for asset owners” — a reference to universal basic income, but in this case benefiting those who already hold significant wealth rather than the working class.

Yet, Cuban warns, this bet hinges on several critical factors: How quickly will the Federal Reserve lower rates? Will jobs return? Will consumer spending rebound? If these conditions do not align, the plan could unravel, leading to economic consequences far beyond Wall Street.

The Fragility of the Economy

The economic outlook remains uncertain. Inflation, which surged in 2022 and 2023, showed signs of moderation in 2024, but many analysts fear that cutting rates too aggressively could reignite price pressures. Meanwhile, job growth has been tepid, and consumer sentiment remains cautious amid geopolitical instability and shifting trade policies.

Cuban also pointed to a growing issue: America’s increasing economic isolation. Globalization, once a key driver of U.S. economic success, has taken a hit as the country moves toward protectionist policies, rethinks trade alliances, and reshapes supply chains. A more insular economy could reduce access to international capital and markets, making it harder for businesses to grow and sustain momentum.

The Election Factor

The political landscape adds another layer of complexity. President Joe Biden’s administration made significant strides in lowering inflation, but the numbers still remain cautiously high. Inflation is certainly a key factor shaping markets, but not the only one. The national debt continues to take up a larger and larger portion of the national budget, creating urgency for President Donald Trump’s administration to lower rates. However, cheap money creates more inflation, which could hamstring the lower and middle class. 

A successful economic turnaround could be a major political win, reinforcing confidence in the new administration’s economic strategy. But a miscalculation could deepen economic woes, harming both consumers and businesses just as America heads into the next election cycle.

A High-Stakes Gamble

Cuban is not alone in his concerns. Many economists and financial experts fear that the Federal Reserve is walking a tightrope. Lowering rates too quickly could create asset bubbles and reignite inflation, while keeping rates too high for too long could stall economic growth. The outcome of this gamble could determine the trajectory of the U.S. economy for years to come.

As Cuban puts it, “It could crush the economy. But if it works, they claim they cut the deficit, reignited the economy and the stock market, lowered mortgage rates, etc.” The question remains: Do policymakers have the precision to pull it off?

For now, Cuban’s answer is clear: No.