Donald Trump, the likely 2024 Republican presidential nominee, said that if he were to be re-elected, he would not reappoint Jerome Powell as chairman of the Federal Reserve, claiming the central bank’s plans to cut rates this year are only in President Biden’s interest.
“No, I wouldn’t,” Trump said when asked about keeping Powell after the latter’s second term expires in 2026, in an interview with Fox Business.
“I think he’s going to do something to help the Democrats if he lowers interest rates,” Trump said, though Powell recently squashed hopes for imminent cuts despite Wall Street’s expectations that borrowing costs would be slashed from their current 22-year high as early as March.
“I think he’s political,” Trump reiterated to Fox.
“I don’t think it’s likely the committee will reach a level of confidence by the time of the March meeting” to lower rates, “but that’s to be seen,” Powell said in a closely watched press conference following the latest Federal Open Market Committee meeting Wednesday.
During the two-day meeting, central bankers decided to keep interest rates unchanged, between 5.25% and 5.5%.
Despite the decades-high rate, which has held steady since the Fed’s July meeting, the stock market performed well throughout 2023: The S&P 500 finished off the year with a 24% gain, while the Dow Jones Industrial Average advanced 14% and the Nasdaq closed out 2023 with an impressive 43% rise — its best performance since 2020, which was attributed to the year’s artificial intelligence boom.
When asked why the stock market did so well under Biden, Trump said, “Because they [voters] think I’m going to be elected,” in comments earlier reported on by Bloomberg.
Trump shied away from divulging whom he would appoint as Fed chair if it wasn’t Powell. “I would have a couple of choices. I can’t tell you now,” he told Fox’s Maria Bartiromo.
Trump has swept primary as well as popularity polls in recent weeks, receiving the highest raw vote total in the history of New Hampshire’s first-in-the-nation primary last week and winning the Iowa caucuses by a historic landslide the week prior.
The former president was the first non-incumbent Republican presidential candidate to win both the Iowa caucuses and New Hampshire primary.
In 2017, during Trump’s term as the 45th US president, he nominated Powell, 70, to serve as chair of the Fed, replacing Janet Yellen, who has gone on to serve as the secretary of the Treasury under Biden.
At the time of Powell’s nomination, Trump, 77, described him as “strong, committed [and] smart.”
Trump’s tune has changed since then. There were reports in 2019 that Trump threatened to demote Powell for raising interest rates — a drag on Trump’s surging economy.
Trump denied the allegations. “I’d be able to do that if I wanted but I haven’t suggested that,” he told NBC at the time.
When Biden reappointed Powell for a second four-year term atop the central bank in 2021, Trump said he was surprised by the move, according to Bloomberg, criticizing Powell as “always late, whether it was good or bad,” with making policy decisions.
Over the past year, Powell has frequently reiterated that his goal is to get inflation back down to 2% — a reading the US economy hasn’t seen in more than a decade.
The latest inflation reading came in at a hotter-than-expected 3.4% in December and dampened hopes that interest rates would start to come down as early as March.
