Donald Trump said on Tuesday that anyone who disagrees with his approach to interest rates and the overall US economy will not be appointed chair of the Federal Reserve.
Speaking in a long Truth Social post, Trump declared that he has not enacted what he calls ‘The Trump Rule.’
“The Financial News today was great — GDP up 4.2% as opposed to the predicted 2.5% (and this, despite the downward pressure of the recent Democrat Shutdown!),” said Trump.
The president added that markets no longer react the way they once did, as past rallies followed good economic news, while current rallies fade because investors assume the Fed will step in to curb inflation by raising rates.
Trump said this mindset blocks the kind of long-term market growth the country once experienced during earlier expansion periods.
He argued that strong markets do not cause inflation and said bad policy decisions do. Trump stated that his preferred Fed chair would cut rates when markets are performing well and avoid what he described as unnecessary interference.
“I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever,” Trump wrote.
Trump said inflation should be handled later if needed, not during market rallies. He added that rate hikes can wait until there is a clear reason, saying the wrong timing can stop growth that could lift GDP by double digits within a year.
Trump also said economic planners who resist market expansion prevent sustained growth. He wrote that the United States should reward success and not punish it, adding that anyone who disagrees with him will never hold the Fed’s top job.
Kevin Hassett backs faster cuts as Fed signals caution
Kevin Hassett, the National Economic Council director, echoed parts of Trump’s stance in a CNBC interview on Tuesday. Kevin said the Federal Reserve is moving too slowly on rate reductions, even though economic growth has accelerated. He said the United States is lagging other central banks globally when it comes to easing policy.
Kevin said advances in artificial intelligence are pushing productivity higher while also keeping inflation pressure lower. He also linked recent growth to trade policy, saying tariffs implemented under Trump reduced the U.S. trade deficit and accounted for about 1.5% of third-quarter growth.
Official figures showed the economy expanded at an annual rate of 4.3%, exceeding the Dow Jones consensus estimate of 3.2%.
The Federal Reserve cut rates by a quarter point on Dec. 10, marking its third reduction of the year. The central bank also indicated future cuts could slow.
Three Fed governors voted against the move, the highest number of dissents since 2019. After the meeting, Jerome Powell, the current Fed chair, said the decision was “a close call.”
Trump has repeatedly criticized the Fed for not cutting rates faster. Kevin’s potential candidacy to replace Jerome when his term ends in May has raised concerns among some Fed watchers about political closeness to the White House. Kevin addressed that directly, saying on CNBC last week that Fed independence is “really important.”
Trump said in a prime-time address last week that he will announce his Fed chair nominee soon. He said the choice will be someone who strongly supports lower interest rates.
The speech focused on affordability pressures facing households. A CBS News/YouGov poll published Sunday showed Trump’s economic approval rating at 37%.
When asked about that figure, Kevin said public opinion often lags behind economic performance. “In the end, it turns out that I think it has a lot to do with news coverage and how people are processing, their glimpse of the outside world,” Kevin said.
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Source: https://www.cryptopolitan.com/trump-says-disobey-me-wont-be-fed-chair/
