By Ginika Igboke
President Donald Trump said on Jan. 22 that he will soon announce his choice to lead the Federal Reserve, renewing criticism of outgoing Chair Jerome Powell and signaling he wants a central bank chief who will move more quickly to cut interest rates.
Speaking to reporters aboard Air Force One, Trump declined to name his pick but said the individual is widely known and respected.
“I will be telling you soon,” Trump said when asked about the next Fed chair. “I have somebody that I think will be very good, but I’m not going to reveal it.”
When pressed on whether the nominee would come from Wall Street, Trump offered few specifics, emphasizing the candidate’s reputation.
“Somebody that’s very respected, very well known, and will do, I think, a very good job,” he said.
Trump’s remarks followed comments a day earlier indicating he was narrowing his decision after interviews and discussions with potential candidates. In a Jan. 21 interview with CNBC, he named three contenders previously identified by his advisers: BlackRock chief bond investment manager Rick Rieder, Federal Reserve Governor Christopher Waller, and former Fed governor Kevin Warsh.
“I’d say we’re down to three [candidates],” Trump said. “And I probably can tell you we’re down to maybe one in my mind.”
He added that White House economic adviser Kevin Hassett would remain in his current role rather than being considered for the Fed position.
“I like actually keeping [Hassett] where he is, you want to know the truth. I don’t want to lose him. He’s so good on television,” Trump said.
Treasury Secretary Scott Bessent said on Jan. 20 that the list had been narrowed to four candidates. Trump told CNBC that Bessent—who has also been mentioned as a possible contender—preferred to stay at the Treasury Department.
“He’s fantastic. But Scott only wants to stay where he is,” Trump said.
Trump also praised Rieder’s interview performance, saying all the candidates had impressed him.
“Rick is very good. They’re all good. You know, all three are good,” he said.
Powell’s four-year term as Fed chair ends in May, though his term as a Fed governor runs through January 2028.
Powell Under Fire
Attention on Trump’s selection comes amid sustained criticism of Powell, whom the president has frequently faulted for not lowering interest rates quickly enough.
“We have a terrible chairman right now, Jerome ‘Too late’ Powell,” Trump said during a Jan. 21 speech at the World Economic Forum in Davos, Switzerland. “He’s always too late, and he’s very late with interest rates, except before the election, he was just fine for the other side.”
Trump has repeatedly argued that the Federal Reserve is constraining economic growth by moving too slowly to cut rates. He has called for interest rates as low as 1 percent, telling the Davos audience that the United States “should be paying the lowest interest rate of any country in the world.”
In the same speech, Trump referenced his shortlist to replace Powell, saying all three candidates could do a “fantastic job,” while expressing concern that Fed leaders often change their stance once in office.
“They said everything I want to hear, and then they get the job, they’re locked in for six years, and all of a sudden, ‘Let’s raise rates a little bit,’” Trump said. “It’s amazing how people change once they have the job.”
Powell and other central bank officials have defended their approach, arguing that inflation pressures remain elevated and that more data is needed to ensure inflation is moving sustainably toward the Fed’s 2 percent target.
The Federal Reserve’s next policy decision comes as inflation remains stubborn. The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 2.8 percent in November from a year earlier, up from 2.7 percent in October, according to data released by the Bureau of Economic Analysis on Jan. 22. Core PCE inflation also increased to 2.8 percent, with services prices up 3.4 percent and goods prices rising 1.4 percent.
The Fed’s policy-setting Federal Open Market Committee is widely expected to hold rates steady at its Jan. 27–28 meeting, with the benchmark federal funds rate currently in a range of 3.5 to 3.75 percent.
Original article
Comments