Washington, June 7: President Donald Trump expressed his confidence in the newly appointed Federal Reserve Chairman Kevin Warsh on Sunday, stating that he is excellent and should make his own decisions regarding monetary policy.
In a special interview with NBC’s Meet the Press, Trump emphasized that despite a better-than-expected jobs report, the U.S. central bank should lower interest rates instead of raising them.
As Warsh prepares to chair his first Federal Reserve meeting at the end of this month, Trump clarified that he has no intention of pressuring him. “My feeling is different. I think Kevin is fantastic, and I want him to do what he wants. I don’t want to put too much pressure on him,” he said.
This statement followed the release of the jobs report, which Trump has repeatedly cited as evidence of a strong U.S. economy. “Our report was very good. We are doing very well,” he remarked.
When asked if the positive employment figures might compel the Federal Reserve to raise interest rates, Trump argued against it. “There is no reason to raise interest rates. The country is great. We built it by doing well and keeping rates low,” he asserted.
Trump noted that the markets now react negatively to strong economic data because investors anticipate a tighter monetary policy. “If you go back 15 or 20 years, good reports used to push the market up. Nowadays, good reports often lead to market declines because they think rates will go up,” he explained.
He added, “When they raise interest rates, they try to kill success. I don’t want to kill success.” The President believes that lower borrowing costs will help accelerate economic growth. “I would like rates to be lower because we can make this the greatest machine in the world,” he stated.
Trump dismissed concerns that rapid economic expansion necessarily leads to inflation, asserting, “Growth is the biggest thing you can have, and growth does not cause inflation.”
When asked if he would be upset if the Federal Reserve raised rates, Trump reiterated his trust in Warsh and made his preferences clear. “Because of Kevin, I have a lot of respect for him, but I believe that when a country is doing well, it should not be punished with immediate interest rate hikes. It should actually be encouraged,” he said.
He further mentioned that lower rates would assist the government in repaying debt and support major national priorities. “I want to expand our military. If we do what I’m saying, it will be a beautiful, well-running machine like you’ve never seen before,” Trump concluded.
Former Federal Reserve Governor Warsh is regarded as a leading Republican economic voice. As Fed Chair, he will oversee policy decisions during a time when policymakers are balancing strong labor market data against inflation risks and significant uncertainties related to geopolitical tensions and global economic conditions.
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