Trump Pushes for Deep Rate Cuts as Fed Chair Decision Nears
Donald Trump is shaping the future of US monetary policy around a single objective: dramatically lower interest rates.
The identity of the next Federal Reserve chair, he suggests, will ultimately depend on who is willing to move fastest in that direction.
- Trump is prioritizing aggressive rate cuts when choosing the next Fed chair.
- Kevin Warsh and Kevin Hassett remain leading contenders, with no final decision yet.
- The Fed’s recent rate cut and internal dissent have intensified the leadership debate.
As Trump moves closer to naming a successor to Jerome Powell, two names continue to circulate inside the White House: Kevin Warsh and Kevin Hassett. But rather than presenting the choice as a contest of résumés, Trump has framed it as a test of alignment with his economic priorities – especially his desire for much cheaper borrowing costs.
At the heart of the deliberations is Trump’s frustration with the current rate environment. Despite a recent cut by the Federal Reserve, he believes policy remains far too restrictive. In his view, interest rates should fall toward levels closer to 1%, or even below, a shift he argues would sharply reduce the cost of servicing America’s massive federal debt.
Rates First, Personnel Second
Trump has made clear that rate policy is not a secondary consideration in his decision-making. During private discussions with potential candidates, he has focused heavily on their views about easing monetary conditions. One such meeting, held recently at the White House, centered on whether a future Fed chair would support additional cuts if economic conditions allowed.
Trump later confirmed that he has found broad agreement among his advisers and interviewees on the need for lower rates. That consensus, he said, reinforces his belief that the Federal Reserve has been too cautious.
The president has also revisited an idea that has long unsettled central bank traditionalists: closer coordination between the Fed and the White House. While stopping short of demanding obedience, Trump has argued that consultation between the two used to be standard practice and should not be treated as taboo.
A Divided Fed Adds Urgency
The timing of Trump’s comments is notable. Earlier this week, the Federal Reserve approved a modest rate reduction, but the decision exposed sharp internal divisions. The vote featured the most dissent in years, signaling growing disagreement over how quickly policy should be loosened.
Those fractures have strengthened Trump’s case that the central bank needs new leadership – someone more willing to move decisively in his preferred direction. For Trump, the next chair will not just manage inflation and employment but also play a critical role in shaping fiscal sustainability through lower financing costs.
Lessons From the Powell Appointment
Trump has openly acknowledged that his previous Fed pick did not meet expectations. Reflecting on his decision to appoint Jerome Powell in 2017, he said he relied too heavily on advice from others and intends to avoid repeating that mistake.
This time, Trump says he is personally involved in every stage of the selection process. Multiple conversations are ongoing, and while he has hinted that one candidate stands out, he has resisted making an early announcement.
Behind the scenes, senior administration officials are also weighing in. Treasury Secretary Scott Bessent has reportedly spoken with several sitting Fed governors, all of whom were appointed during Trump’s first term. Trump has expressed satisfaction with those appointments, even as he considers a change at the top.
Two Paths to the Same Goal
Hassett and Warsh arrive at the moment from different professional backgrounds, but Trump appears less focused on their past roles than on their future actions.
Hassett, a longtime Trump ally and trained economist, has worked closely with the president across multiple administrations and currently plays a central role in shaping economic policy from within the White House.
Warsh, by contrast, brings experience from both Wall Street and the Federal Reserve system itself, having served as a governor during a turbulent period for global markets. Trump previously passed over Warsh in favor of Powell, a decision he now openly questions.
This time, the calculus is different.
As Trump approaches a final decision, the message is unmistakable: the next Federal Reserve chair will be judged not by tradition or precedent, but by willingness to push rates lower. In an environment where monetary policy is once again deeply political, independence may matter less than alignment.
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