BREAKING: Donald Trump Comments on New Fed Chair and Interest Rates - "Should Be Reduced Below 1 Percent"

Donald Trump said he is beginning to finalize his choice for the head of the Federal Reserve (Fed) next year. Mr. Trump announced that he is considering former Federal Reserve Board member Kevin Warsh and National Economic Council Director Kevin Hassett for the Fed chair position. In an interview with the Wall Street Journal in the Oval Office, Mr. Trump stated that Mr. Warsh is at the top of the list of potential candidates. Mr. Trump said, “Yes, I think so. There are Kevin and Kevin. Both Kevins are great. And there are also a few other great names.” Although recent comments suggest Mr. Hassett is emerging as the favorite candidate, Mr. Trump’s remarks indicate that Mr. Warsh remains a strong contender. According to reports, during a nearly 45-minute meeting at the White House on Wednesday, Trump asked Warsh whether he would support interest rate cuts if he became Fed chair. Trump confirmed this information in an interview with the Wall Street Journal, saying, “He thinks rates need to be lowered. Everyone I’ve talked to agrees.” Mr. Trump argued that the new Fed chair should consult him on interest rate decisions. “This happens less often now, but it used to be common. I think it should be done,” Mr. Trump said, adding that this does not mean the Fed chair must follow direct orders from the White House, but that his opinions should be considered. When asked what interest rate he would like to see in a year, Mr. Trump replied, “1%, or even lower.” He argued that cutting rates would reduce the U.S. government’s debt servicing costs by about $30 trillion. “We should have the lowest interest rates in the world,” he said. This week, the Federal Reserve (Fed) cut its policy rate by 25 basis points to 3.5–3.75%. This decision was made in a vote that faced the strongest opposition since 2019. Two Fed officials completely opposed the rate cut, while Trump’s former advisor, Stephen Miran, voted for a larger cut of 50 basis points. In recent weeks, Mr. Trump has hinted that he has made a decision regarding the Fed chair position. However, in his latest statements, he said the final decision has not yet been made. He also expressed dissatisfaction with relying on advice from former Treasury Secretary Steven Mnuchin in selecting the current Fed Chair Jerome Powell. “There’s one name I particularly like, but I want to be careful. Because I received bad advice when I chose Powell in 2017,” he said. There are reports that Trump is continuing the final round of negotiations for the Fed chair position, including an interview with Hassett. Treasury Secretary Scott Bessent is said to have met with current Fed chairs Christopher Waller and Michelle Bowman, who were appointed during Trump’s first term. Trump stated, “I like all the people I have appointed to the board.” Ms. Hassett, who holds a Ph.D. in economics, is considered the leading candidate due to Ms. Bessent’s decision not to run for the position and her long-standing cooperation with Mr. Trump. Ms. Hassett served as a senior economic adviser to Mr. Trump from 2017 to 2019, briefly returned in 2020 during the Covid-19 pandemic, and has headed the National Economic Council since January of this year. Previously, Kevin Warsh served as an economic adviser during George W. Bush’s administration, worked on Wall Street, and was a member of the Federal Reserve Board of Governors from 2006 to 2011. Mr. Trump also interviewed Warsh for the Fed Chair position in 2017, but at that time he prioritized Jerome Powell, who is known for his moderate monetary policy stance.