According to the Shanghai Daily, at 9 p.m. local time on Wednesday, US President Donald Trump addressed the nation. Trump stated that the government had very quickly reduced high prices and claimed that wages were rising far faster than inflation.
Trump also stated that a new Federal Reserve chairman will be appointed soon, and that he is a candidate who endorses low interest rates.
"I will soon announce the next chairman of our Federal Reserve Board who is convinced that interest rates will fall significantly and mortgage payments will fall even further," Trump said.
Federal Reserve Chairman Jerome Powell's term will end next May. President Trump has previously stated that he will announce Powell's successor early next year.
Currently, all known candidates—White House economic advisor Kevin Hassat, former Federal Reserve Governor Kevin Warsh, and current Federal Reserve Governor Chris Waller—advocate that interest rates should be lower than current levels.
Currently, the Federal Reserve's interest rate ranges from 3.5% to 3.75%. However, no one has explicitly stated that they will necessarily lower the Fed's interest rate significantly below 1%, as Trump has demanded. Even his newly appointed Fed governor, Stephen Milan, does not advocate for such a low level of interest rates.
Since early September, U.S. mortgage rates have remained in the 6.3% to 6.4% range with little sign of decline. Previously, Trump had repeatedly expressed his desire to lower mortgage rates, but the impact of interest rates controlled by the Federal Reserve on long-term borrowing costs is limited.
Trump told the media last week that he preferred Warsh or Hassett as the next Federal Reserve governor. However, interviews were still being conducted as of Wednesday.
Waller was one of the first among current Federal Reserve policymakers to support lowering interest rates, but he is also a staunch advocate for the Fed's independence.
Trump also stated last week that he believes the next Federal Reserve chairman should discuss interest rate settings with him . This clearly deviates from convention: past US presidents have typically delegated interest rate decisions to the Federal Reserve.
“It hasn’t been like this for a long time (the president and the Federal Reserve chairman discussing interest rates together). It used to be done often, and it should be done now,” Trump said. “That doesn’t mean—I don’t think he should do exactly what we say. But there’s no doubt—my opinion is wise and should be listened to.”
(Article source: CLS)
