Federal Reserve Chairman Powell says there is no Trump pressure to lower interest rates
President Donald Trump has pressured the Federal Reserve to lower interest rates, and Jerome Powell is still saying no.
President Donald Trump said Wednesday he was looking for a new Federal Reserve Chairman to replace Jerome Powell, narrowing his search to “three or four.”
“I know within three or four that I’m planning on choosing,” Trump said in response to a question at the NATO summit in the Netherlands. “I think he’s terrible, so it means he’s going out right away.
Trump did not name any potential alternatives, but Bloomberg News reports that Treasury Secretary Scott Bescent’s name is circulating as one option. Former Fed Governor Kevin Wahsh and current Governors Michelle Bowman and Christopher Waller have also been mentioned as possible.
Last week, Bowman and Waller supported Trump’s request for the Fed to cut interest rates immediately after the meeting in late July.
What is the current Fed’s interest rate?
The president calls for Powell, and the Fed is demanding that key interest rates be reduced to 2.25%, from 4.5% to 4.5%, to 2.25%, to juice the economy and cut interest on federal debt of $36 trillion.
The Fed, an independent institution aimed at being insulated from politics, cut its shares by percentage in the final months of 2024, but Powell said officials are waiting for another move to see how Trump’s sweeping tariffs will affect inflation.
“We don’t have inflation, we have an incredible economy,” Trump said Wednesday, but the Fed’s priority inflation scale exceeds the 2% target. “Because of him, this guy, we have to pay… for years we will pay for him.”
Trump added that if the Fed’s benchmark rate is three percentage points lower, the US government would save $900 billion a year on interest payments.
“For this very average spiritual person,” Trump said, referring to Powell.
Powell met with Trump at the White House a few weeks ago.
“I told him, ‘Listen, there’s no inflation,'” Trump said Wednesday.
“He said, ‘There’s probably a few.’
“I said, ‘If there is, you’ll raise the fee.”
But economists say that lower fees can be too late if they affect Americans’ inflation expectations and start to ripple over the economy.
In a social media post, Trump called Powell a “silly guy” and “Trump’s hatred” after the Fed decided to keep the rate consistently at its fourth meeting last week. Powell was confirmed as the Fed’s board chair in February 2018 after being appointed by Trump in his first term.
What is the current inflation rate?
The Fed’s priority inflation measures have been eased to 2.5%, but moderately surpassing the 2% target, Powell said the House Financial Services Committee on June 24th said Trump’s import taxes will begin to rise more orderly at retail prices this summer.
Powell said it is unclear whether these price increases will be a one-off rise or a sustained burden on households as they will affect Americans’ inflation expectations and lead to wage and price cycles.
“Wait and see more,” Powell told lawmakers. “This is just a matter of being cautious and cautious when the labour market is still strong.”
