Trump Promises New Fed Chair Will Support Low Interest Rates
US President Donald Trump said that the next Federal Reserve chairman will be someone who supports significant interest rate cuts. This statement was made in a national address highlighting the economic and national security achievements during Trump's second year in office. He added that with lower interest rates, mortgage payments in the US could fall further.
Trump previously said he would announce his replacement for current Fed Chairman Jerome Powell early next year. Some known candidates include White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh, and current Fed Governor Chris Waller. All of these candidates support lower interest rates than current levels, although none are yet firmly ready to cut them to the extreme 1% level that Trump wants.
The Fed's current fed funds rate is in the 3.5%-3.75% range, and even Trump's most recent appointment, Governor Stephen Miran, does not support cutting them to such low levels. Trump has repeatedly emphasized the desire for lower interest rates to encourage mortgage declines, but the Fed's control over longer-term interest rates, such as the 10-year Treasury yield, is limited. Long-term mortgage rates have remained in the 6.3%-6.4% range since Labor Day and show little sign of easing.
Trump also stated that the next Fed chairman should consult with him on interest rate decisions, although US presidents typically let the Fed make its own decisions. He emphasized that while the Fed chairman doesn't have to follow all of the president's advice, Trump's voice as a "smart guy" should be taken into account. Currently, Trump is reportedly still considering Warsh or Hassett, but the meeting with Waller is still ongoing. (az)
Source: Newdsmaker.id
