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Donald Trump said he would only choose a new president of the Federal Reserve which would reduce American interest rates, as he called on the Central Bank to write borrowing costs to 1%.
The president also renewed his attack on the current chair Jay Powell, describing him as a “tenacious mule” and saying that he “would like to resign if he wanted it”. Powell said he would serve the duration of his mandate, which ended in May 2026.
“The one who is there will be lower,” Trump told journalists in the oval office on Friday, referring to his choice to replace Powell. “If I think someone will keep the prices where they are, I’m not going to put them.”
Trump’s comments mark the latest barrage of an unprecedented attack by an American president against the head of the country’s central bank. He has repeatedly criticized the Fed’s decision to maintain the rates pending at 4.25 to 4.5% this year, interrupting a cutting cycle that started in 2024.
“I think we should pay [rates of] 1% right now, “said Trump. He added that he had said to his administration “to do no debt beyond about nine months” until a new president of the Fed took office. Despite his comments, the Treasury is expected to sell long -standing bonds during the next fortnight.
Trump said earlier this week that he already had a limited list of “three or four names” to manage the Fed, although the White House told Financial Times that no decision was “imminent”.
His pressure on Powell brought speculations that he could choose a “Fed Shadow chair” which agrees with him on drop rates quickly.
Christopher Waller, a governor of the Fed, considered a candidate to replace Powell, supported a rate drop in July. Kevin Hassett, another candidate who now heads the National Economic Council of the White House, also supported the reduction in loan costs.
Scott Bessent, the US Treasury Secretary who is also in the running, said that the two -year cash tickets indicates that the Fed should reduce rates.
Another candidate, the former Fed governor Kevin Warsh, said he thought that the central bank’s emphasis should be to fight inflation, which suggests that he is more bellicist than other candidates.
Many believe that the shadow strategy could turn against him.
“Although it looks like an intelligent idea, it does not hold,” said Robert Barbera, an economist at Johns Hopkins University. “The reason is that the Fed is not a royalty.”
The President of the Fed establishes interest rates alongside 18 other members of the Federal Open Market Committee. Eleven in addition to the president also have a vote.
“If the next president was trying to flex the muscles he does not really have really, it would mainly damage relations with the rest of the committee,” said Jon Faust, former special advisor to Powell who is now also at Johns Hopkins. “It would decrease the influence that the new chair would have arrived.”
Raghuram Rajan, an academic from the University of Chicago, which has undergone political pressure as head of the Reserve Bank of India, said that the unique structure of the Fed – with a centralized council supported by 12 private regional banks – isolated tariffs to be unduly influenced by the president’s rhetoric.
It was “very little” that the president could do to influence the regional presidents or other governors of the Fed, said Rajan.
Additional Kate Duguid reports in New York
