Trump Picks Hassett and Warsh as Leading Candidates for Fed Chair
President Donald Trump stated that Kevin Hassett and Kevin Warsh are his leading candidates to head the US Federal Reserve, expressing his expectation that the next chair of the central bank will engage with him regarding interest rates. In an interview on Friday, Trump suggested that Warsh, a former Fed governor, has risen on the short list of candidates to compete with Hassett, the head of the White House National Economic Council, who many had regarded as the leading contender for the position. “I think the two Kevins are great,” he stated. “I believe there are a few other individuals who are exceptional.”
Trump previously indicated that he had already made a decision, stating on Monday that he had “a pretty good idea” of whom to nominate. Last month, the president stated, “I know who I would pick for the job.” The most recent remarks indicate that the selection process is still undergoing changes. Later in the Oval Office, Trump stated, “the next Fed chair should consult with me on interest rates,” a statement that would disrupt the longstanding tradition of the Fed’s independence.
“I’ve been very successful, and I think my role should be at least that of recommending — they don’t have to follow what I say,” Trump told reporters, adding he expected to make a choice “over the next few weeks. I believe my voice deserves to be heard, yet I will not base my decision solely on that,” he continued. Trump has taken steps to assert control over the central bank in his second term, frequently voicing frustration that the Fed has not been more aggressive in reducing borrowing costs under Chair Jerome Powell.
In the interview, Trump advocated for a significant reduction in rates, stating they should be “1 per cent and maybe lower than that.” The Fed on Wednesday lowered its benchmark rate to between 3.5 per cent and 3.75 per cent, marking its third cut in as many meetings. Three central bank officials expressed dissent regarding the decision, and the Federal Open Market Committee continues to be uncertain about potential further reductions.
