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Donald Trump has said he will elect a new president of the Federal Reserve, which will lower interest rates because he has called on the central bank to reduce the cost of borrowing to 1 percent.
The president also renewed his attack on the current chair Jayei PowellDescribing it as a “stubborn mule” and saying that “he will want to resign if he wants.” Powell said he would serve the duration of his mandate, ending in May 2026.
“Whoever is there will cut the rates,” Trump told reporters at the Oval Office on Friday, referring to his choice to replace Powell. “If I think anyone will keep the footsteps where they are, I will not put them.”
Trump’s comments mark the latest barrage in an unprecedented attack by a US president of the country’s central bank head. He has repeatedly denied the Fed’s decision to keep it rates Standing at 4.25-4.5 % this year, stopping the cutting cycle that began in 2024.
“I think we have to pay (rates of) 1 percent right now,” Trump said. He added that he told his administration “not to make a long nine -month or so” until he took over the new Fed goods. Despite his comments, the Ministry of Finance should sell long -term bonds over the next two weeks.
Trump said earlier this week that there was already a shortlist for “three or four names” to make the Fed, although the White House told the Financial Times that no decision was “immediate”.
His pressure on Powell has made speculation that he can choose a “shadow chair”, which agrees with him to quickly reduce rates.
Christopher Waller, Governor of the Fed, who is considered a candidate to replace Powell, supported a rate reduction immediately in July. Kevin Hasset, another candidate now led by the National Economic Council in the White House, has also supported the reduction in borrowing costs.
Scott Besen, secretary of the US Treasury, who is also on the run, said the yield of two -year finance notes suggests that the Fed should cut the rates.
Another candidate, former Fed Governor Kevin Warsh, signaled that he believed the central bank’s focus should be on fighting inflation, suggesting that he is more awake than other candidates.
Many believe that the shadow strategy can respond.
“Although it sounds like a smart idea, it doesn’t stick,” said Robert Barbera, an economist at Johon Hopkins University. “The reason is because the Fed is not a kingdom.”
The Fed chair sets interest rates along with 18 other members of the Federal Open Market Committee. Eleven despite the chair, they also have a voice.
“If the next chair tries to flex the muscles, he is still gone, it will mainly damage relations with the rest of the committee,” said Jonon Faust, a former special adviser to Powell, who is now at NSON Hopkins. “It will reduce the influence of the new chair.”
Ragham Rajan, an academic university in Chicago, who was under political pressure as head of the Reserve Bank of India, said the unique structure of the Fed-with a centralized board supported by 12 private regional banks-isolated rate rate of inappropriate influence by the president’s rhetoric.
There was “very little” that the president could do to influence regional presidents or other Fed governors, Rajan said.
Additional notice from Kate Duguid in Newoufor
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