Former President Donald Trump complained that interest rates are too high and indicated that if he gets another term in office, he might pressure Federal Reserve Chair Jerome Powell to loosen monetary policy.
In an interview set to air Sunday on NBC’s “Meet the Press,” Trump also hinted that he would at least consider removing Powell.
“Interest rates are very high. They’re too high. People can’t buy homes. They can’t do anything. I mean, they can’t borrow money,” Trump told MTP host Kristen Welker during her premiere on the long-running talk show. Welker replaces Chuck Todd, who hosted his final show last week.
Asked specifically by Welker whether he would try to strong-arm Powell into lowering rates, Trump said, “Depends where inflation is. But I would get inflation down.”
A history of conflict
The remarks harken back to the contentious relationship the two officials had when Trump served from 2017-2021.
Using the platform formerly known as Twitter, Trump often berated Fed officials, once calling them “boneheads,” and compared Powell to “a golfer who can’t putt.” Those remarks came while the Fed was raising interest rates in 2018 and 2019.
“We do know that I put a lot of pressure on him,” Trump told Welker. “It was outside pressure, because nobody knows whether or not you can really do that, but I did, because I thought his interest rates were too high. And he ultimately dropped his interest rates.”
Indeed, the Fed began cutting rates in 2019, ultimately taking its benchmark borrowing rate down to near-zero as the Covid pandemic hit in March 2020.
Trump’s criticism of the Fed came even though he appointed Powell, who was confirmed in 2018, to succeed Janet Yellen, who went on to become Treasury secretary under President Joe Biden.
Asked whether he might try to replace Powell should he be re-elected in 2024, Trump hedged.
“Well, I guess he would have two years left or something like that, so we’ll see,” he said.
“You know the word jawboning? I did a lot of jawboning against him, and he ultimately lowered interest rates. We had lower interest rates. We had the best housing market ever. We had people buying homes,” he added. “Things are not going, right now, very well for the consumer. Bacon is up five times. Food is up horribly, worse than energy.”
‘I would get inflation down’
Inflation has been a major problem during the Biden administration after staying benign under Trump and, before that, Barack Obama.
The consumer price index has risen more than 16% in just over 2 ½ years of the Biden presidency; it was up less than half that for the entirety of Trump’s presidency.
However, economists largely agree that the seeds were planted for higher prices in the early days of the Covid crisis, when supply chains froze, consumer demand switched from services to goods, and Congress and the Fed injected trillions of dollars in stimulus in an effort to combat the pandemic’s economic impact.
Trump vowed that he would lower inflation.
“I would get inflation down, because drill we must. We will be drilling for oil. We are going to become, again, energy independent. We are going to reduce our debt, because we’re also going to become energy dominant,” he said.
The Fed meets next week and is expected to hold rates steady. Powell’s term expires in February 2026.
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