As the year draws to a close, the race to succeed Powell is intensifying, with Trump expected to announce his final nominee early next year. Furthermore, Trump recently reiterated his past stance that the Federal Reserve Chairman should consult the president on interest rate decisions.
“We don’t usually do that anymore. It used to be routine, but we should continue to do it now. My point is insightful and should be heard,” he said.
Kevin Hassett, one of the leading candidates and director of the White House National Economic Council, responded that if selected as chairman of the Federal Reserve, he would consider President Trump’s policy opinions, but the central bank’s interest rate decisions would remain independent.
On Sunday, Eastern Time, Hassett said on a program that the president "has a very firm and well-founded view on what we should do."
“But ultimately, the Fed’s responsibility is to remain independent and work with the members of the Federal Reserve Board and the Federal Open Market Committee (FOMC) to reach a consensus on what level interest rates should be,” he added.
For months, Trump and his senior advisors have been urging Federal Reserve Chairman Jerome Powell to cut interest rates quickly and significantly, but the results have clearly been disappointing. Trump has repeatedly attacked Powell in public and even threatened to fire him.
Recently, Trump stated that he has decided who will succeed Powell and will announce the nomination early next year. Powell's term as Federal Reserve Chairman will end on May 15, 2026, and his term as a governor will end on January 31, 2028. Hassett and former Federal Reserve Governor Kevin Warsh are considered the most likely candidates to succeed Powell.
"We'll soon have a great Fed chairman who will want to see interest rates go down," Trump said at a holiday reception at the White House on Sunday. "But we're struggling with higher interest rates."
In the aforementioned program, Hassett also stated that he would present the president's views to Federal Reserve officials for consideration, but that they could, of course, accept or reject these views when making interest rate decisions. He implied that Trump was one of many "experts" who could be fairly consulted, even if he ultimately only offered advice.
However, he dismissed the claim that the president's voice would have equal weight with that of FOMC voting members, stating that policymakers are free to reject Trump's opinions and "vote differently."
“No, his opinion has no influence. It’s just that his viewpoint matters if it’s good and if it’s based on data. Ultimately, the voting power is in the hands of the committee. I’d love to chat with the president every day until we’re both dead, because it’s so interesting,” he added.
(Article source: CLS)
