Emre Yumlu 
U.S. President Donald Trump has once again placed monetary policy at the center of political debate, offering striking remarks on the future leadership of the Federal Reserve (Fed) and the direction of interest rates in the United States. As the term of the current Fed Chair approaches its end next year, Trump signaled that his decision-making process has narrowed to a short list, while reiterating his firm stance in favor of significantly lower borrowing costs.
Two Prominent Names for the Fed Chairmanship
According to Trump, two candidates stand out in the race to lead the Federal Reserve: former Federal Reserve Governor Kevin Warsh and current Director of the National Economic Council Kevin Hassett. Speaking from the Oval Office, Trump described both figures as highly capable, noting that Warsh remains near the top of his list despite growing speculation that Hassett may be the frontrunner.
Trump emphasized that discussions with potential candidates are ongoing and that no final decision has been made. His comments suggest that the selection process remains fluid, with both experience inside the Fed system and alignment with broader economic priorities playing a role.
A Clear Call for Lower Interest Rates
Lower interest rates remain a central pillar of Trump’s economic outlook. He confirmed that during a recent meeting with Kevin Warsh, the issue of rate cuts was directly addressed. Trump stated that, in his view, there is broad consensus among policymakers and advisors that interest rates should move lower.
Looking ahead, Trump said he would like to see rates fall to around one percent within the next year, or potentially even below that level. He argued that such a shift would materially reduce the financing burden of the United States’ roughly 30 trillion dollar public debt and strengthen the country’s competitive position globally.
Consultation with the White House: A Controversial View
Perhaps the most contentious element of Trump’s remarks was his assertion that the Fed Chair should consult with the President on interest rate decisions. While stressing that this would not mean direct political control over the central bank, Trump maintained that presidential input should be taken seriously, noting that similar practices were more common in earlier decades.
These statements have revived longstanding debates around central bank independence and the appropriate boundaries between monetary policy and political leadership.
Reflections on Past Decisions
Trump also reflected critically on his earlier choice of Jerome Powell as Fed Chair, suggesting that he relied too heavily on external advice at the time. He indicated that this experience has made him more cautious as he evaluates candidates for the role going forward.
As markets watch closely, the eventual appointment of the next Fed Chair is likely to shape expectations around U.S. monetary policy, government debt management, and global financial conditions in the years ahead.
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