Trump says Fed chair should ‘do whatever he wants’ but criticizes possible interest rate hikes
President Donald Trump criticized the possibility of the Federal Reserve raising interest rates, but said in an interview on NBC News’ “Meet the Press” that he wants Fed Chair Kevin Warsh “to do whatever he wants.”
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“Kevin is fantastic, and I want him to do whatever he wants,” Trump told moderator Kristen Welker. “I don’t want to have a big influence on him. But we had a great report. We’re doing great, and it’s unfair that whenever you do great, they want to raise interest rates.”
The May jobs report indicated that the labor market was still resilient, adding 172,000 jobs while the unemployment rate remained consistent. The report came amid heightened concerns over oil and gas prices, which have risen since the start of the Iran war.
“Nowadays when you have good reports, the market goes down because they think they’re going to raise interest rates,” Trump said during the interview. “There’s no reason to raise interest rates.”
Trump bashed the possibility of the Fed raising interest rates, arguing that higher rates would effectively punish the country.
“There’s no reason to raise interest rates,” Trump said. “The country becomes great. We built the country by doing great and having rates low. What they do is when they raise interest rates, they try and kill success. I don’t want to kill success. We should actually lower interest rates.”
Trump repeatedly pressured the previous Fed chair, Jerome Powell, to lower interest rates, deriding him as “too late” and “a major loser.”
Powell had argued that a now-dropped investigation into the Federal Reserve was actually “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.” The Justice Department had subpoenaed the Fed related to Powell’s Senate testimony over the agency’s office renovations, Powell said at the time.
Earlier this year, Trump told NBC News that Warsh, his pick to lead the Fed next, would not have been selected if Warsh told Trump that he wanted to raise interest rates. In the same interview, Trump said that the Fed was “in theory” an “independent body,” but went on to tout his economic perspective, arguing he knew “the economy better than almost everybody.”
The 12-person Federal Open Market Committee determines interest rates. The Fed chair sits on the committee, but does not unilaterally determine interest rates.
On Friday, stock indexes fell as the jobs report raised investor concerns that the Fed might raise interest rates this year.
Oil and gas prices have remained elevated since the Iran war began, though they have fallen from their peak. The national gas price average stands at $4.17 a gallon, up $1.19 since the war began but down from its height of $4.56.
Asked during the interview whether he would be upset if the Federal Reserve raised rates, Trump praised Warsh, saying he has “a lot of respect for him,” before arguing again for lower rates.
“If we do what I’m saying, this will be a beautiful, well-oiled machine like you’ve never seen before,” Trump said.
