Trump to Announce Fed Chair Nominee Tomorrow, Ramping Up Pressure for Rate Cuts

The Financial News reported that U.S. President Donald Trump has announced he will unveil his nominee for the next Chair of the Federal Reserve System (the Fed), the U.S. central bank, on the 30th local time. He has been openly pressing the Fed to cut interest rates, and the upcoming appointment is seen as an attempt to directly influence the central bank’s monetary policy stance.
President Trump attended a screening of the documentary film "Melania" at the Trump-Kennedy Center for the Performing Arts in Washington, D.C., on the 29th and told reporters, "I will announce the Fed chair tomorrow morning." It is unusual for him to specify the exact timing of the Fed chair appointment in public.
Potential candidates for the next Fed chair include Kevin Hassett, Director of the National Economic Council (NEC), former Fed governor Kevin M. Warsh, and current Fed governors Christopher Waller and Michelle Bowman. Some of them are viewed as having been relatively supportive in the past of a more accommodative monetary policy.
President Trump has repeatedly urged the Fed to deliver rapid and substantial interest rate cuts. He has been particularly critical of current Fed Chair Jerome Hayden Powell, saying he is "holding back economic growth." Political tensions surrounding the Fed have intensified recently, after the United States Department of Justice (DOJ) opened an investigation related to Powell over cost overruns in the renovation of the Marriner S. Eccles Federal Reserve Board Building.
At a cabinet meeting the same day, Trump again took issue with the benchmark interest rate set by the Fed. He said, "The current benchmark rate is unacceptably high," adding, "The United States should have the lowest interest rates anywhere in the world." His remarks were widely interpreted as a renewed call for early rate cuts to support economic growth and energize financial markets.
Market observers warn that Trump’s announcement of his Fed chair pick could heighten volatility in financial markets. They note that if the debate over the Fed’s independence flares up again, it could have short-term effects on U.S. Treasury yields and the dollar.
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km@fnnews.com Reporter Kim Kyung-min Reporter