President Donald Trump acknowledged Wednesday he would have rejected his Federal Reserve chair nominee if the candidate wanted to raise interest rates, telling NBC News the central bank operates as an independent body only “in theory.”
Trump tapped Kevin Warsh, a former Federal Reserve board member, to succeed current Chair Jerome Powell when his term expires in May. The president has criticized Powell for months over the pace of interest rate cuts.
Read: Trump: Next Fed Chair Must Want to Cut Interest Rates
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“I think he does, but I think he wants to anyway,” Trump said when asked if Warsh understands the president wants lower rates. “I mean, if he came in and said, ‘I want to raise them.'”
NBC anchor Tom Llamas interjected: “If he said that, he wouldn’t have gotten the job?”
“He would not have gotten the job,” Trump responded. “No.”
The president expressed confidence that rates would soon fall, citing what he described as low inflation and strong economic growth. When pressed on how he could be certain, Trump said: “I just think they’re going to be lowered. I mean, they should be lower.”
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“We’re way high, OK?” Trump told Llamas. “We’re way high in interest.”
Trump suggested the Fed should follow his lead because he knows “the economy better than almost everybody,” though he acknowledged the central bank is “in theory” an independent body.
The Federal Open Market Committee sets monetary policy through votes by 12 members: seven permanent governors plus five rotating seats filled by regional bank presidents. The Fed chair cannot act alone on interest rates.
The central bank held rates steady in January following three straight monthly cuts, with just two committee members supporting further reductions. Powell maintains the Fed bases decisions on economic data, particularly inflation trends and employment figures.
December inflation measured 2.7% annually, the Bureau of Labor Statistics reported. During Trump’s first year back in office, inflation fluctuated between 2.3% and 3%.
Read: Powell Faces Criminal Investigation as Trump Intensifies Pressure on Fed
Trump also disputed the renovation costs at Federal Reserve headquarters, claiming Powell spent “almost $4 billion on a very small, little complex of buildings.” Fed documents place the project cost at $2.5 billion for completion in 2027. Taxpayers do not fund the renovations.
Powell has accused the White House of using a Justice Department investigation into the renovation project to pressure the Fed on rates. Last month, Powell revealed the DOJ had subpoenaed the Fed with threats of criminal indictment.
Also read: Republican Senators Threaten to Block Trump’s Fed Nominees Over Powell Probe
Sen. Thom Tillis and other Republicans have said they will not approve Warsh’s nomination until the investigation is resolved. Trump said Attorney General Pam Bondi and US Attorney for DC Jeanine Pirro “will make their own decision” on the probe.
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