Trump: If Walsh dares to raise interest rates, he cannot possibly get nominated; he knows I want to cut rates.
U.S. President Trump publicly stated that if his nominee for Federal Reserve Chairman, Waller, expressed a desire to raise interest rates, he would not be nominated at all. This statement has once again sparked concerns in the markets about the Fed’s independence and may become a focal issue at Waller’s Senate confirmation hearing.
In an interview with NBC News on Wednesday, Trump made it clear, “If he comes in and says ‘I want to raise rates,’ he’s not getting the job, period.” Trump emphasized that Fed rate cuts are “undoubtedly” needed because “our interest rates are too high,” and now “we’re a wealthy country again.”
When asked whether Waller understood Trump wanted him to lower the benchmark interest rate, Trump replied: “I think he understands, but I think he was planning to do that anyway.” These remarks revealed the White House’s clear expectations regarding the direction of monetary policy.
Trump’s public pressure may intensify doubts about the Fed’s policy independence and inject more uncertainty into the upcoming confirmation process.
Confirmation Process Faces Resistance
Waller’s nomination is expected to undergo strict scrutiny, with Fed independence likely to be a central issue.
Republican Senator Thom Tillis, a member of the Senate Banking Committee, has pledged to block all of Trump’s Federal Reserve nominees until the Justice Department concludes its investigation into the Fed’s renovation project.
Outgoing Fed Chairman Jerome Powell previously called the investigation an indirect attack on the Fed’s ability to independently set monetary policy. Officials from the Trump administration deny this intent, but the president himself has been pressuring Powell for rate cuts for months.
Waller’s Shift in Position
Waller, a former member of the Federal Reserve Board, is known for his hawkish stance, but has recently expressed support for rate cuts.
This former Fed official established a reputation as an anti-inflation hawk while in office, but his latest public statements show a shift in his policy stance, now aligning more closely with Trump’s call for rate cuts.
Trump’s latest comments effectively confirm a direct link between nomination decisions and monetary policy leanings, something rare in Fed history and potentially setting a new precedent for central bank independence.
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