President Donald Trump praised Federal Reserve Chair Kevin Warsh ahead of his first rate-setting meeting while arguing that strong employment numbers should not lead the central bank to raise interest rates.
By yourNEWS Media Newsroom
President Donald Trump publicly praised Federal Reserve Chair Kevin Warsh in an NBC News interview aired Sunday, while making clear that he believes the central bank should lower interest rates rather than raise them after a stronger-than-expected jobs report.
Trump made the comments during an exclusive “Meet the Press” interview with moderator Kristen Welker. The interview was taped Friday at Custer Farms in Chippewa Falls, Wisconsin, and aired days before Warsh was set to preside over his first Federal Open Market Committee meeting.
“Kevin is fantastic, and I want him to do whatever he wants,” Trump said. “I don’t want to have a big influence on him.”
The remarks marked a notably different tone from Trump’s repeated criticism of former Federal Reserve Chair Jerome Powell. Trump had previously attacked Powell as “too late” and “a major loser” over Powell’s refusal to cut interest rates.
Still, Trump’s supportive comments toward Warsh came with an unmistakable policy preference. The president argued that the Fed should not treat economic strength as a reason to tighten monetary policy.
“We had a great report. We’re doing great, and it’s unfair that whenever you do great, they want to raise interest rates,” Trump said.
“There’s no reason to raise interest rates,” he added.
The debate comes as investors weigh whether the Federal Reserve could move toward another rate hike. Markets had begun pricing in that possibility after the May employment report, which showed the U.S. economy added 172,000 jobs while the unemployment rate remained steady.
The jobs data helped fuel concern that the Fed may prioritize containing inflation rather than easing policy. Stocks fell Friday after the report.
Trump rejected the idea that strong employment should lead to higher borrowing costs.
“The country becomes great. We built the country by doing great and having rates low. What they do is when they raise interest rates, they try and kill success. I don’t want to kill success. We should actually lower interest rates,” Trump said.
The president’s comments came as the economy faces conflicting signals. Hiring remains solid, but higher fuel costs tied to the war with Iran have kept pressure on consumers and businesses. The national average price for gasoline stands at $4.17 per gallon, up $1.19 since the Iran war began, though below a peak of $4.56.
Warsh’s first FOMC meeting will test how he handles presidential pressure while leading a central bank designed to set monetary policy independently. The 12-member FOMC, not the chair alone, determines the federal funds rate. The chair leads the process but must work with the full committee.
Trump has previously described the Fed as “in theory” independent. Earlier this year, he told NBC News that Warsh would not have been his choice if Warsh had indicated he wanted to raise rates.
The president’s treatment of Warsh contrasts sharply with his clashes with Powell. The Justice Department earlier dropped a probe into the Federal Reserve tied to Powell’s Senate testimony on renovations at the central bank’s offices. Powell argued that the inquiry reflected the Fed’s insistence on making policy based on its own assessment rather than the president’s preferences.
Asked whether he would be upset if Warsh supported a rate hike, Trump again praised the new Fed chair personally before returning to his argument for lower rates.
“If we do what I’m saying, this will be a beautiful, well-oiled machine like you’ve never seen before,” Trump said.
The upcoming decision will be Warsh’s first major public test as chair. It also will show how the new Fed leadership balances a strong labor market, inflation concerns, elevated fuel prices and public pressure from a president who says interest rates should move lower.
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