In a fresh wave of criticism, former President Donald Trump publicly accused Federal Reserve Chairman Jerome Powell of keeping interest rates “artificially high,” reigniting tensions between political leadership and the central bank. Speaking on Fox News’ Sunday Morning Futures, Trump labeled Powell as a “bad” and “stupid person” and insisted the current rate levels are unjustified given the strength of the U.S. economy.
Trump argued that interest rates should be significantly lower, ideally between 1% and 2% compared to the current target range of 4.25% to 4.5%. “It doesn’t even matter,” Trump said during the interview, “the numbers are so good it doesn’t matter that he keeps the rates artificially high.” These comments come amid persistent speculation about Trump’s efforts to influence future monetary policy should he return to office.
White House Eyes Greater Control Over Monetary Policy
Trump’s latest remarks build on a broader pattern of his administration’s attempts to apply pressure on the Federal Reserve. Just two days before the interview, Trump told reporters that he would only consider nominating a new Fed chair who would immediately move to cut interest rates. This statement marks the clearest indication yet of the former president’s desire to assert tighter White House control over monetary policy decisions.
Further fueling the speculation, Treasury Secretary Scott Bessent told CNBC that the administration may nominate a replacement for Powell as soon as October, even though Powell’s term as chair doesn’t end until May of the following year. This has sparked concerns on Wall Street that conflicting guidance from a potential “shadow” Fed chair and the official Fed leadership could create confusion and instability in the financial markets.
Speculation Grows Around Possible Successors
While Trump suggested that interest rates were being kept artificially high under Powell’s leadership, he mentioned having three potential replacements in mind—though he chose not to reveal their names. However, when asked directly about former Fed governor Kevin Warsh, Trump acknowledged Warsh’s qualifications. “Kevin is very talented, but I don’t know that it’s going to be him,” Trump said. “But he’s a very talented guy. He wouldn’t be doing what Powell is.”
The suggestion of new leadership at the Fed, particularly one closely aligned with Trump’s views on interest rates, signals a significant shift in the traditionally independent nature of the Federal Reserve. Critics warn that any move to politicize the central bank could undermine investor confidence and complicate efforts to manage inflation and stabilize the economy.
As speculation swirls around Trump’s plans for the Fed, markets and policymakers alike are bracing for a potential power struggle over the direction of U.S. monetary policy.