President Trump says he will announce his nominee for Federal Reserve chair Friday morning, as he puts pressure on the Fed to cut interest rates.
“I’ve chosen a very good person to head the Fed,” he told reporters late Thursday. He described his pick as somebody who is “very respected” and “known to everybody in the financial world.”
The president hasn’t said who he will nominate for the influential economic policy role. He’s indicated in recent weeks that the two front-runners are White House National Economic Council Director Kevin Hassett and former Fed board member Kevin Warsh, telling Reuters earlier this month, “the two Kevins are very good.” He suggested to the news service that other candidates could be in the mix, too.
But Mr. Trump has made clear what he’s looking for in the next Fed chair: a willingness to reduce interest rates at a faster clip.
The president has lashed out at current Federal Reserve Chair Jerome Powell over the Fed’s slow-and-steady approach to interest rate cuts over the last year. Lower rates could lead to hotter economic growth and cheaper borrowing costs for consumers and businesses, but at the risk of causing inflation to resurge.
In recent months, Mr. Trump has called Powell a “stubborn mule” and “Mr. Too Late,” and has mused about firing Powell, whom Mr. Trump initially appointed Fed chair in his first term. Powell’s term as Fed chair ends in May, but he can remain a rank-and-file member of the Fed’s Board of Governors until early 2028 — though most outgoing Fed chairs step down from the central bank altogether.
The pressure on Powell ramped up earlier this month, after Powell announced that the Fed was served subpoenas from the Justice Department over a criminal investigation into Powell. The probe focused on Powell’s testimony before the Senate Banking Committee concerning a pricey project to renovate the Fed’s D.C. headquarters.
Powell cast the subpoenas as an effort to intimidate the Fed and undermine its independence.
“The threat of criminal charges is 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,” Powell said.
The White House says Mr. Trump didn’t direct the Justice Department to issue subpoenas, and U.S. Attorney for D.C. Jeanine Pirro has insisted the subpoenas were “not a threat,” but were instead issued because the Fed wasn’t answering questions.
In an interview with CBS News earlier this month, Mr. Trump brushed off allegations of political retribution, saying: “I can’t help what it looks like.”
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