Is the rate cut coming soon? Trump bluntly states: If Wosh had expressed a willingness to raise interest rates, he wouldn't have been nominated!

Last Friday, U.S. President Trump nominated former Federal Reserve Board member Kevin Warsh to be the next Chair of the Federal Reserve, and Warsh is widely regarded as hawkish on monetary policy. The cooling of rate cut expectations triggered a short-term sharp re-pricing of major global assets, putting pressure on U.S. stocks and causing gold and precious metals markets to decline significantly.

However, there is still uncertainty about what stance Warsh will take once he assumes the chairmanship of the Federal Reserve, and market speculation is rife. On Wednesday, U.S. time, President Trump made a statement on this matter.

Trump bluntly stated, “If the person I nominate for Fed Chair has expressed a desire to raise interest rates, then that person will not get the job.”

In an interview, Trump said he has no doubt that rates “will be cut very soon.” When asked why he is so confident, he replied, “I just think rates will go down. I mean, rates should be lower anyway.”

“Rates are ridiculously high, you know?” Trump said, “Our interest rates are too high. Now, under my leadership, with continuous inflows of capital into our country — I’ve always been good at handling economic affairs — the U.S. is becoming a wealthy nation again. We do have debt, but the economy is also growing strongly, and this growth will soon make the debt levels look insignificant.”

In addition to economic growth, Trump pointed out another way to address the debt issue — cutting spending, and he said his administration “has been doing that all along, and with notable results.” He stated that his government has laid off hundreds of thousands of federal employees. After leaving government, these individuals found new jobs in the private sector.

When asked whether Warsh, the nominee for the next Fed Chair, is aware that the president hopes he will cut rates, Trump responded, “I think he knows, and I believe he himself is inclined to cut rates. I mean, if he had come in saying I want to raise rates, he wouldn’t get the job, no.”

Last week, Trump announced that he had officially nominated Warsh to succeed Jerome Powell as Fed Chair. For months prior, Trump had criticized Powell for not taking more aggressive rate-cutting measures.

It should be noted that the Fed Chair cannot unilaterally decide the central bank’s interest rates. The rate policy is set by the Federal Open Market Committee (FOMC), which has 12 members, including 7 Federal Reserve governors, 4 rotating district reserve bank presidents, and the President of the New York Fed.

In January this year, after three consecutive rate cuts, the Fed chose to keep rates unchanged, with only two committee members supporting further cuts.

In recent months, Powell has defended the Fed’s policy direction, stating that all decisions are based on inflation data and the actual state of the labor market.

Last month, Powell revealed that federal prosecutors are investigating his testimony to Congress regarding the Fed’s Washington headquarters renovation project. He responded in a video that this investigation is “an excuse,” aimed at further pressuring the Fed and undermining its political independence.

(Source: Cailian Press)