President Donald Trump said he would prefer for Federal Reserve Chair Jerome Powell to step down if he chooses to do so.
President Donald Trump said on Friday that he may appoint someone who is more inclined to lower interest rates to succeed Federal Reserve Chair Jerome Powell.
“If I think somebody’s going to keep the rates where they are or whatever, I’m not going to put them in. I’m going to put somebody that wants to cut rates,” Trump told reporters at the Oval Office.
Trump criticized Powell for not lowering interest rates and said that he would “love” the head of the U.S. Federal Reserve to step down if Powell chooses to do so.
The president suggested lowering rates to 1 percent, although he believes cutting interest rates by two percentage points would save the country “more than $600 billion” annually.
“I think we should be paying 1 percent right now,” he said.
The Fed decided last week to keep its benchmark policy rate unchanged at 4.25 to 4.50 percent.
Powell, whose term is set to expire in May next year, has held off on cutting interest rates, citing the need for more clarity on the possible course of the economy following the administration’s policy changes.
During his semi-annual monetary policy report to Congress on June 24, he told lawmakers that the central bank is waiting to determine if Trump’s global tariffs will result in consumer inflation.
While data over the last three months indicate that price pressures have yet to materialize, Powell said that any tariff-related inflation could appear in the June or July data.
“As we go through the summer, we should start seeing this,” he said. “If we don’t, I think we’re perfectly open to the idea that the pass-through will be less than we think.”
Powell stated that the central bank may begin cutting interest rates if it observes that inflation pressures remain contained.
Trump said on Friday that lowering interest rates now could save the country “hundreds of billions of dollars.” He suggested that the Fed could raise rates later if inflation begins to increase.
