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Trump plans to pick Fed chair who supports lower interest rates

Myfirst1

Myfirst1

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2 min read
Trump plans to pick Fed chair who supports lower interest rates
President Donald Trump announced he intends to choose a new Federal Reserve Chair who favors cutting interest rates when current Chair Jerome Powell’s term ends next year. Speaking from the Oval Office, Trump emphasized his desire for a leader who aligns with his economic goals, particularly lowering borrowing costs to stimulate growth.

This move has raised concerns about the Federal Reserve’s independence, as the central bank traditionally operates free from political influence to maintain economic stability. Trump’s comments come amid ongoing tensions with Powell, whom he has criticized for not reducing rates quickly enough. He stated, “I want someone who will bring rates down,” signaling his preference for a chair who prioritizes cheaper borrowing over maintaining current rates.

This approach could impact the Fed’s ability to control inflation and manage economic policy objectively. Market reactions have been swift, with investors adjusting expectations for earlier rate cuts. Treasury yields and the dollar dipped as speculation grew about a more dovish Fed chair. Some experts worry that appointing a chair based on rate-cutting promises could undermine the Fed’s credibility and long-term economic strategy.

Trump also mentioned having three or four candidates in mind, but did not name them. The White House later clarified that no decision is imminent, despite earlier reports suggesting an announcement as early as September. This situation highlights the delicate balance between political priorities and the Fed’s role in fostering sustainable economic growth.