WASHINGTON -- President Trump said he was leaning toward choosing either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve next year.
In an interview with The Wall Street Journal in the Oval Office on Friday, the president said Warsh was at the top of his list. "Yes, I think he is. I think you have Kevin and Kevin. They're both -- I think the two Kevins are great," he said. "I think there are a couple of other people that are great."
Hassett has been increasingly viewed as the front-runner after Trump repeatedly teased in recent weeks that he had settled on his choice to lead the Fed, but Trump's comments suggest Warsh remains solidly in contention.
During a 45-minute meeting with Warsh on Wednesday at the White House, the president pressed Warsh on whether he could trust him to support interest-rate cuts if he were chosen to lead the central bank, according to people familiar with the meeting. Trump, in the Journal interview, confirmed that reporting.
"He thinks you have to lower interest rates," Trump said of Warsh. "And so does everybody else that I've talked to."
Trump said he thought the next Fed chair should consult with him on where to set interest rates.
"Typically, that's not done anymore. It used to be done routinely. It should be done," Trump said. "It doesn't mean -- I don't think he should do exactly what we say. But certainly we're -- I'm a smart voice and should be listened to."
Asked where he wants interest rates to be a year from now, Trump said, "1% and maybe lower than that." He said rate cuts would help the U.S. Treasury reduce the costs of financing $30 trillion in government debt.
"We should have the lowest rate in the world," he said.
The Fed cut its benchmark interest rate this week by a quarter point to a range between 3.5% and 3.75%, a three-year low, though the decision drew three dissenting votes, the most since 2019. Two officials opposed any cut while a third, former Trump adviser Stephen Miran, voted for a larger half-point cut.
Trump in recent weeks has said he had already made up his mind about who should lead the central bank. He restated that view on Friday, but suggested he hasn't made a final decision. He also acknowledged his frustration over having chosen the current Fed chair, Jerome Powell, by relying on the advice of then-Treasury Secretary Steven Mnuchin.
"I think I have somebody that I like the best," Trump said. "I like all of them, but I want to be careful because I was given a bad recommendation" when picking Powell in 2017.
Trump is holding a final round of interviews with the top contenders to be Fed chair, including Hassett. Treasury Secretary Scott Bessent has also interviewed two current Fed governors appointed by Trump in his first term, Christopher Waller and Michelle Bowman, in narrowing the list of potential candidates. "I like the people -- all of the people I put on the board, I like," Trump told the Journal.
Hassett, who has a Ph.D. in economics, has been viewed as the front-runner because Bessent has said he isn't interested in the job and because of all the candidates, Hassett has worked for Trump the longest. Hassett served as a senior economic adviser to Trump from 2017-2019, returned on a short-term basis during the Covid pandemic in 2020, and became the head of the National Economic Council this past January.
In an interview this week, Hassett played down speculation that he was the presumptive favorite in betting markets. Trump "makes his choice, and then he changes his mind, too," Hassett said at a Journal event.
Warsh, a former George W. Bush administration economic adviser who previously worked on Wall Street, served as a Fed governor from 2006-2011.
In 2017, Trump interviewed Warsh for the job but picked Powell, who as a then-Fed governor had publicly supported the central bank's easy-money policies. Trump quickly soured on Powell and has repeatedly threatened to fire him.
Trump said he was frustrated that financial markets had become accustomed to worrying that the Fed would raise interest rates whenever economic activity or hiring is stronger than expected.
"I won't have anybody on the Federal Reserve that when you have good news, that means you automatically raise interest rates through the roof in order to kill inflation," Trump said. "If you have lots of good news, they will do everything they can to stop it, because they're so afraid of inflation."
Comments