Former President Donald Trump speaks to the press at the Iowa Pork Producers booth during the 2023 Iowa State Fair at the Iowa State Fairgrounds, August 12, 2023.
Demetrius Vrijman | The Washington Post | Getty Images
Former President Donald Trump complained that interest rates are too high and indicated that if he gets another term, he could pressure Federal Reserve Chairman Jerome Powell to ease monetary policy.
In an interview that aired 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 houses. They can’t do anything. I mean, they can’t borrow money,” Trump told MTP host Kristen Welker during her Long Term premiere. – running a talk show. Welker replaces Chuck Todd, who hosted his last show last week.
When Welker specifically asked whether he would try to force Powell to cut rates, Trump said, “It depends on where inflation is. But I would get inflation down.”
A history of conflict
The comments reference 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 “sons of a bitch,” and likening Powell to “a golfer who can’t putt.” These comments came as the Fed raised 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 no one knows if you can really do that. But I did, because I thought his interest rate was too high. And in the end he lowered his interest rate.”
The Fed began cutting rates in 2019, eventually cutting its key interest rate to near zero when the Covid pandemic hit in March 2020.
Trump’s criticism of the Fed came despite the fact that he appointed Powell, who was appointed in 2018, to succeed Janet Yellen, who later became Treasury secretary under President Joe Biden.
When asked whether he would try to replace Powell if re-elected in 2024, Trump hedged.
“Well, I guess he’s got two years left or something, so we’ll see,” he said.
“You know the word jawbones? I said a lot to him, and he finally lowered the interest rate. We had lower interest rates. We had the best housing market ever. There were people buying houses,” he added. “Consumers are not doing so well right now. Bacon is up five times. Food is up terribly, even worse than energy.”
‘I would get inflation down’
Inflation was a major problem during the Biden administration, after remaining favorable under Trump and before that under Barack Obama.
The consumer price index has risen by more than 16% in just over two and a half years of Biden’s presidency; it was less than half higher than during Trump’s entire presidency.
However, economists largely agree that the seed for higher prices was planted in the early days of the Covid crisis, when supply chains seized up, consumer demand switched from services to goods, and Congress and the Fed injected trillions of dollars of stimulus into an attempt to combat the economic impact of the pandemic.
Trump promised to lower inflation.
“I would get inflation down, because drilling is necessary. We will drill for oil. We will become energy independent again. We will reduce our debt, because we will also become energy dominant.” he said.
The Fed meets next week and is expected to keep interest rates steady. Powell’s term ends in February 2026.