With interest rate cuts on the horizon and the economy turning around from its post-pandemic slump, former President Trump has warmed to Federal Reserve Chairman Jerome Powell, whom he has frequently criticized since nominating him to lead the U.S. central bank in 2017.
“I intend for him to complete his term,” Trump said in the interview, referring to Powell’s term as Fed chair. Bloomberg reported on Tuesday“Especially if he thinks he’s doing the right thing.”
President Trump has warned the Federal Reserve to refrain from cutting interest rates, which are widely seen as a way to stimulate the economy, before the November election, Bloomberg reported.
“They know they shouldn’t do that,” he said, according to Bloomberg.
According to Reuters, Powell said on Monday he does not plan to step down as Fed chair when his term expires in 2026, which could mean renewed hostility between the Fed and the White House if President Trump is elected to a second term.
The wave of criticism directed at the Fed during Trump’s first term represented a new norm for the central bank, which has long prided itself on its fundamental independence and portrayed itself as above the day-to-day political fray.
President Trump began criticizing Chairman Powell shortly after taking office, and the Fed began raising interest rates from 2017 through 2019.
Reuters reported in 2018 that Trump had even considered firing Powell, but White House officials said Trump acknowledged he probably did not have the authority to fire her.
President Trump said in February that he would not appoint Powell for another term and accused her of being “political.”
“It seems to me that he’s trying to lower interest rates maybe just to get elected, but I don’t know,” Trump told Fox Business Network’s Maria Bartiromo.
“I think he’ll probably do something to help the Democrats,” he said.
The monetary policy environment has changed since then: Inflation is below 3% annually and markets are expecting two broad rate cuts by the end of the year.
Importantly, one of them could be announced at the Fed’s next meeting in September, two months before the presidential election.
