"If I think somebody is going to keep interest rates where they are, or something similar, I won't nominate them. I'll pick somebody that wants to lower interest rates. There are a lot of them out there," US President Donald Trump said at the White House last week, referring to the position of Federal Reserve (Fed) chair.
Many US presidents have complained about the Fed not setting interest rates as they wished. However, Trump has gone further by outlining specific criteria for his Fed chair nominee.
The president believes the Fed should cut interest rates by 1% from the current 4.25-4.5%. Over the past few months, he has repeatedly criticized Fed Chair Jerome Powell for maintaining rates. "I'd be very happy if he would want to resign. He's done a terrible job," Trump commented, continuing to call Powell a "fool".
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US President Donald Trump at the White House on 27/6. Photo: AP |
US President Donald Trump at the White House on 27/6. Photo: AP
After aggressively raising interest rates to combat inflation, the Fed cut rates three times in the second half of last year. However, since Trump's second term began in January 2025, the Fed has not adjusted monetary policy. Most Fed officials are concerned that Trump's tariff policies could reignite inflation. While the Fed still projects a 50 basis point (0.5%) cut this year, this is far less than the president's demand.
Trump has recently stopped threatening to fire Powell after the Supreme Court supported the view that the president cannot dismiss the Fed chair solely due to policy disagreements. This is seen as a safeguard for the Fed's independence.
The Wall Street Journal (WSJ) reported on 25/6 that Trump is considering choosing and announcing his nominee for the next Fed chair in September or October. Powell's current term ends in 5/2026.
On 25/6, when asked by reporters whether he was interviewing candidates to replace Powell, Trump replied, "I'll make a choice from a group of three or four people." According to media reports, the leading contenders include Fed Governor Kevin Warsh, White House Economic Adviser Kevin Hassett, Federal Reserve Board member Christopher Waller, and Treasury Secretary Scott Bessent.
Previous presidents have typically announced their choices three or four months before the current chair's term ends. With over 10 months left in Powell's tenure, Trump's early nomination is seen as an attempt to undermine Powell's authority.
Ha Thu (Reuters)
