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BREAKING — Trump says he wants a Fed Chair who will cut interest rates to 1 percent …

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Hassett, for his part, made the case at the WSJ CEO Council on Tuesday that he would be independent if chosen. He said the Fed chair’s role is to “do the right thing.” “Suppose that inflation has gotten from, say, 2.5 percent to 4 percent,” he said. “You can’t cut.” The tension between such comments and the fact that the Fed chair sweepstakes is ongoing underscores just how difficult Trump is making things for his future Fed chief. Delivering cuts next year might also be easier said than done.

 

The hits keep coming for President Donald Trump’s future nominee to head the Federal Reserve.

 

Hassett, for his part, made the case at the WSJ CEO Council on Tuesday that he would be independent if chosen. He said the Fed chair’s role is to “do the right thing.” “Suppose that inflation has gotten from, say, 2.5 percent to 4 percent,” he said. “You can’t cut.” The tension between such comments and the fact that the Fed chair sweepstakes is ongoing underscores just how difficult Trump is making things for his future Fed chief. Delivering cuts next year might also be easier said than done.
Trump openly acknowledged in an interview with POLITICO’s Dasha Burns that he would only pick someone to succeed Fed Chair Jerome Powell who is committed to cutting interest rates immediately. The comment was striking, given that central bank policymakers are unusually split on the best course of action next year.

Though Trump’s penchant for low rates is long established, the pronouncement raises further alarms about his potential interference in central bank policymaking and the threat to its global credibility. After all, the Fed’s rate-setting committee is never certain how it might adjust rates this far out. Powell’s term as chair isn’t up until May.

And though Fed policymakers cut rates for the third straight time on Wednesday in a bid to protect a weakening job market, there are plenty of scenarios that might call for them to hold rates steady throughout much of 2026 — and some that might even warrant rate hikes.

While Sen. Kevin Cramer (R-N.D.), a member of the Senate Banking Committee that will vet the Fed chair nominee, said it was natural that Trump would want someone with a similar philosophy, he added that the central bank’s behavior will need to adjust with the economic outlook.

“The Fed chairman, along with the rest of the governors and the rest of the committee, I should say, are required to use data, follow the data, and they have a very specific mandate,” Cramer told POLITICO.

But I think it’s a fairly safe presumption at this point that the next Fed chair would probably be inclined toward lower rates.”

Trump’s statements will provide a sharper framing for senators of both parties to question the eventual nominee — a role for which White House economic adviser Kevin Hassett is seen as the frontrunner.

The president had a slightly softer take on Wednesday when asked if he would make his Fed chair nominee pledge to lower rates. “No, no, I will be asking questions, and I will be able to figure it out,” he said during a meeting with CEOs at the White House.

Hassett, for his part, made the case at the WSJ CEO Council on Tuesday that he would be independent if chosen. He said the Fed chair’s role is to “do the right thing.”

“Suppose that inflation has gotten from, say, 2.5 percent to 4 percent,” he said. “You can’t cut.”

The tension between such comments and the fact that the Fed chair sweepstakes is ongoing underscores just how difficult Trump is making things for his future Fed chief.

Delivering cuts next year might also be easier said than done.

Hassett, for his part, made the case at the WSJ CEO Council on Tuesday that he would be independent if chosen. He said the Fed chair’s role is to “do the right thing.” “Suppose that inflation has gotten from, say, 2.5 percent to 4 percent,” he said. “You can’t cut.” The tension between such comments and the fact that the Fed chair sweepstakes is ongoing underscores just how difficult Trump is making things for his future Fed chief. Delivering cuts next year might also be easier said than done.
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