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Donald Trump said that he would only choose a new chairman of the Federal Reserve, who will reduce the US interest rates because he asked the central bank to reduce the credit costs to 1 percent.
The President also renewed his attack on the current chair Jay PowellHe described him as a “stubborn mule” and said that he would “love him to step down if he wanted to”. Powell said that he would serve the duration of his term in May 2026.
“Whoever is in there will reduce prices,” Trump told reporters in the Oval Office on Friday and moved into His choice to replace Powell. “When I think someone holds the prices where they are, I won’t use them.”
Trump’s comments mark the recent barrage in an unprecedented attack by a US president on the head of the country’s central bank. He repeatedly condemned the decision of the Fed to keep Prices This year at 4.25-4.5 percent in the queue of a cutting cycle that started in 2024.
“I think we should now pay 1 percent (tariffs of),” said Trump. He added that he had told his government that he should not be due to nine months for over nine months until a new Fed chair takes office. Despite its comments, the Ministry of Finance will sell bonds dated for fourteen days.
Trump said at the beginning of this week that he already had a selection list with “three or four names” to lead the Fed, although the White House of Financial Times said that no decision was “imminent”.
His pressure on Powell has given speculation that he could choose a “shadow -fed chair” that agrees to him when the interest rates quickly.
Christopher Waller, a FED governor who is seen as a candidate as a replacement of Powell, supported an interest rate cut in July. Kevin Hassett, another candidate who is now heading the National Economic Council in the White House, has also supported the reduction in credit costs.
Scott Bessent, the US finance minister, who is also in the race, has announced that the return of the two-year finance ministries points out that the Fed should lower interest.
Another candidate, the former governor of Fed, Kevin Warsh, signaled that he believes that the focus of the central bank should be on combating inflation, which indicates that he is Hawkischer than the other candidates.
Many believe that the shadow strategy could backfire.
“Although it sounds like a clever idea, it doesn’t hold up,” said Robert Barbera, economist at John’s Hopkins University. “The reason is that the FED is not a royalty.”
The Fed chairman defines the interest rates together with 18 other members of the Federal Open Market Committee. Eleven next to the chair also have a voice.
“If the closest chair tried to bend the muscles that he doesn’t really have, he would mainly damage the rest of the committee,” said Jon Faust, a former special advisor from Powell, who is now also with John’s Hopkins. “That would reduce the influence of the new chair.”
Raghuram Rajan, an academic of the University of Chicago, who was politically under pressure as head of the Reserve Bank of India, said the unique structure of the FED with a central board, which was supported by 12 private regional banks, isolated tariff setter, which is inappropriately influenced by the president’s rhetoric.
There were “very little” that the president could do to influence the regional presidents or other Fed governors, said Rajan.
Additional reporting from Kate Duguid in New York
