US President Donald Trump on Wednesday said that the next Chairman of the country's Federal Reserve will be someone who can lower the interest rates “by a lot”.
Speaking from the Diplomatic Reception Room of the White House in an address to the nation, Trump also teased that he will announce the successor to current Fed Chair Jerome Powell soon.
“I will soon announce our next chairman of the Federal Reserve, someone who believes in lower interest rates, by a lot, and mortgage payments will be coming down even further,” Trump said.
Trump in his national address on Wednesday night rallied behind his economic and national security accomplishments during the first year of his second term.
The Jerome Powell-led Federal Open Market Committee (FOMC) cut benchmark interest rates on December 10 for the third consecutive time, bringing the federal funds rate to 3.50%-3.75%. This is the lowest that Fed rates have been since 2022.
The Fed had in September and October lowered its benchmark interest rates by 25 basis points each. This year, the total Fed rate cut stands at 0.75%, with four policymakers signalling one rate cut next year as per a Reuters report.
Who will be the next Fed chair?
Donald Trump has previously indicated that he will announce the name of the next Fed chair early next year.
Three names have surfaced as the successor to Jerome Powell — who has been facing the ire of Trump for not lowering interest rates enough.
The shortlisted candidates include White House economic adviser Kevin Hassett, ex Fed Governor Kevin Warsh and current Fed Governor Chris Waller.
All of them have supported interest rates to be lower than they are at present.
However, none of the candidates have expressly indicated that they would push the US Federal Reserve to lower its interest rates as low as Trump wants. In some cases, the President has pushed for a crisis-level 1% benchmark interest rate from the FOMC.
The President has time and again advocated for lower mortgage rates but the Fed interest rates have only limited effect on longer-term borrowing costs. Mortgage rates are typically influenced by longer-term rates that the Fed has minimal control over, such as the 10-year Treasury note yield.
Last week, Trump told the Wall Street Journal that he might make Kevin Hassett or Chris Waller the next Fed chair, adding that he thought that the next US central bank head should consult with him on where to set the interest rates.
