US President Donald Trump's rhetoric against Federal Reserve Chairman Jerome Powell has escalated again. On Wednesday, Eastern Time, Trump stated publicly that he wanted to fire Powell, calling him "extremely incompetent." However, he simultaneously hinted that Treasury Secretary Scott Bessant was trying to dissuade him.
On the same day, at the U.S.-Saudi Investment Forum in Washington, he said: "(I will) be honest, I would love to fire him (Powell)." Powell's term as Federal Reserve Chairman expires next May, while his term as a Federal Reserve Governor will last until 2028.
Trump also urged Bessant to "press" Powell to lower interest rates as soon as possible, joking that the jobs of cabinet ministers might depend on this.
“The only thing Scott messed up was the Federal Reserve. Interest rates are too high, Scott. If you don’t fix this soon, I’m firing you,” he said.
Immediately afterwards, Trump mimicked Bessant's private advice to him, saying, "Please don't fire him. He still has three months left in his term, don't fire him," before abruptly changing his tone and saying, "I'm going to get him out!"
However, White House spokesman Kush Desai emphasized in a statement that "the White House has complete confidence in Secretary Bessenter's work in managing the Treasury Department and in finding a new, competent Federal Reserve Chair for President Trump."
On the other hand, Trump added that Commerce Secretary Howard Lutnick was "more inclined to fire Powell," highlighting the divisions within the White House on the matter.
“I think Howard would say, ‘Get him out of here,’” Trump said.
James Ragan, head of research at wealth management research firm DA Davidson, commented, "The market really appreciates having Bessant around (the president). He has consistently been a very rational voice in the Trump administration."
Shortly after Trump made those remarks, the Federal Reserve released the minutes of its October 28-29 Federal Open Market Committee (FOMC) monetary policy meeting. The minutes showed that policymakers were significantly divided on whether to continue cutting interest rates in December. At its October meeting, the FOMC voted 10-2 to cut interest rates by 25 basis points, lowering the target range for the federal funds rate to 3.75%-4.00%.
However, based on recent hawkish comments from Federal Reserve officials, the market is increasingly less confident that there will be an interest rate cut at the December meeting. Trump has consistently criticized Powell for not cutting rates as drastically as he had hoped.
Trump said at the White House on Tuesday that "someone is blocking me" from firing Powell. He also said he was in talks with several candidates to replace Powell and that he believed he had already chosen his successor as the next Federal Reserve chairman.
"I think I already know who I've chosen," Trump said, but he did not reveal who it was.
(Article source: CLS)
