Trump names Hassett, Warsh as top contenders for Federal Reserve chair

By Jennifer A Dlouhy

 

President Donald Trump said that Kevin Hassett and Kevin Warsh are his top choices to lead the US Federal Reserve and that he expects the next chair of the central bank to consult with him on interest rates. 

Trump, in an interview with the Wall Street Journal on Friday, indicated that Warsh, a former Fed governor, has climbed up the short list of contenders to challenge Hassett, the White House National Economic Council head whom many had seen as the frontrunner for the job.

 

“I think the two Kevins are great,” he said. “I think there are a couple of other people that are great.”

 

Trump previously signalled that he already made up his mind, saying Monday he had a “a pretty good idea” of who to nominate. The president last month also said he knew who he would pick for the job. The latest comments suggest that the selection process remains in flux. 

 

Trump met with Warsh on Wednesday. It’s not clear if Trump plans to interview other candidates for the job.

 

The president said Warsh told him that borrowing costs should be lower. 

 

Later in the Oval Office, Trump said the next Fed chair should consult with him on interest rates, a move that would upend a tradition of the Fed’s independence.

 

“I’ve been very successful, and I think my role should be at least that of recommending — they don’t have to follow what I say,” Trump told reporters, adding he expected to make a choice “over the next few weeks.”

 

“I think my voice should be heard, but I’m not going to make the decision based on that,” he continued.

 

Trump has moved to assert control over the central bank in his second term, regularly expressing frustration that the Fed has not more aggressively reduced borrowing costs under Chair Jerome Powell.

 

Trump, in the Journal interview, called for aggressively lowering rates, saying they should be “1 per cent and maybe lower than that.”

 

The Fed on Wednesday lowered its benchmark rate to between 3.5 per cent and 3.75 per cent, its third cut in as many meetings. Three central bank officials dissented from the decision and the Federal Open Market Committee remains undecided about further reductions.