U.S. President Donald Trump stated on Tuesday that he wants the next Federal Reserve Chair to cut interest rates if the economy performs well. Analysts view this as the latest signal that Trump prefers a candidate firmly supportive of monetary easing ahead of announcing a successor to current Fed Chair Jerome Powell.
In a social media post, Trump wrote: "If the market is doing well, I want my new Fed Chair to lower rates—not destroy the market for no reason."
Trump has repeatedly criticized the recent trend where strong economic data sometimes triggers market sell-offs due to investor fears of inflation and expectations of Fed rate hikes. He emphasized: "I want to see a market we haven’t witnessed in decades—one that rallies on good news and falls on bad news. That’s how markets should work, and how they used to. Inflation will resolve itself; if not, we can always hike rates at the right time—but 'the right time' is never to kill a bull market. A strong rally could boost our GDP by 10, 15, even 20 percentage points in a year, or more!"
He added bluntly: "We’ll encourage a thriving market to grow further, not make progress impossible. You’ll see more natural—and better—data than ever. Anyone who disagrees with me will NEVER be Fed Chair."
However, Tuesday’s market action contradicted Trump’s narrative. Despite the U.S. Bureau of Economic Analysis reporting Q3 GDP growth at an annualized 4.3% (above nearly all forecasts), the S&P 500 rose for a fourth straight session, nearing record highs.
Trump’s remarks come as he seeks to lower borrowing costs through new Fed leadership amid mounting political pressure over voter concerns about living costs. He has argued that lower rates would aid the housing market and stressed his desire for alignment with the next central bank chief on rate decisions.
Last week, Trump said he’d narrowed the Fed Chair shortlist to "three or four" candidates, with an announcement expected in "coming weeks." Previously tipped contenders include White House NEC Director Kevin Hassett, ex-Fed Governor Kevin Warsh, and current Fed Governor Christopher Waller, whom Trump praised after interviews.
Earlier this month, the Fed cut its benchmark rate to 3.5%-3.75%, marking a third consecutive reduction. Three policymakers dissented, while the FOMC remains divided on further easing. Trump has repeatedly urged rates near 1% or lower.
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