Trump Says He Will Name Fed Chair Who Pushes Big Rate Cuts

President Donald Trump said he will nominate a Federal Reserve chair who embraces substantial interest rate cuts, and he explicitly linked that choice to relief for mortgage borrowers. The remarks, made this week at the White House and in interviews, come as the Fed moved this week to cut its benchmark federal funds rate by 25 basis points for the third straight meeting to a range of 3.50 percent to 3.75 percent amid signs of a weakening labor market and inflation that remains above the central bank’s 2 percent target.

Trump said his pick "will believe in lowering interest rates by a lot" and confirmed he has met with potential nominees at the White House. He told the Wall Street Journal that whoever succeeds Jerome Powell "should consult with him" on setting future interest rates, and he pressed at least one candidate directly about support for lower rates during a meeting on December 17. The president has also been publicly critical of Powell, using blunt language in recent months that has underscored tensions between the White House and the Fed. He has previously called Powell a "clown," said he has "some real mental problems," said he would "would 'love to fire his ass,'" and described him as "grossly incompetent."

Two names have emerged as front-runners in administration discussions. Kevin Warsh, a former Fed governor, met with the president at the White House on December 17, and Trump said of Warsh, "He thinks you have to lower interest rates." Kevin Hassett, director of the White House National Economic Council and an economist who joined the administration last year, has been widely cited by market observers as an active contender. Hassett has said he would move to cut rates if he were Fed chair and told television audiences on November 20 that he "would be cutting rates right now" in his assessment of current data.

Other figures under consideration include Fed Board member Christopher Waller, who some inside the administration view as potentially more persuasive with colleagues at the central bank. Powell’s term as Fed chair expires in May, setting a timetable for the administration’s choice and a likely confirmation process that could determine the Fed’s direction through the next business cycle.

Markets and policy analysts are watching closely because a chair committed to aggressive easing would shift the balance of U.S. monetary policy. Faster or larger rate cuts could reduce mortgage rates and borrowing costs more broadly, supporting household spending and housing activity in the near term. But economists warn that easing while inflation remains above target could complicate the Fed’s mandate and raise questions about central bank independence if the incoming chair is seen as yielding to political pressure.

Prediction markets have recently priced a higher chance for Hassett, while the White House’s engagement with Warsh signals that the administration is weighing tradeoffs between institutional overhaul and immediate deliverables on rates. The coming weeks will determine whether the nomination reinforces the Fed’s traditional independence or ushers in a more politically aligned approach to U.S. monetary policy.