Former President Donald Trump on Friday criticized Federal Reserve Chair Jerome Powell and said he’s playing politics with interest-rate policy.
“It looks to me like he’s trying to lower interest rates for the sake of maybe getting people elected,” Trump said, in an interview on the Fox Business Network.
“I think he’s political,” added Trump, the likely 2024 Republican nominee for president.
Asked if he would reappoint Powell to a third four-year term, Trump replied “no.”
Trump said he has a couple of choices in mind to replace Powell, but wouldn’t say who.
Trump said he thinks lowering interest rates would lead to massive inflation. The conflict in the Middle East is likely to lead to “big inflation” from a spike in oil prices, he added.
“Trump said he thinks lowering interest rates would lead to massive inflation. The conflict in the Middle East is likely to lead to “big inflation” from a spike in oil prices, he added.”
Powell “is not going to be able to do anything,” Trump said.
On Wednesday, Powell said he wasn’t giving a potential third term any thought. Powell’s current term expires in early 2026.
Speculation on a third term “is not something I’m focused on,” Powell said.
“We’re focused on doing our jobs. This year is going to be a highly consequential year for the Fed and monetary policy. We’re, all of us, very buckled down, focused on doing our jobs,” Powell said.
Analysts say that the Fed will be criticized by both parties in the election year.
On Sunday, Powell will appear on the CBS News program “60 Minutes” and will likely face more questions about the election.
Earlier this week, top Democrats on the Senate Banking Committee urged the Fed to cut rates quickly, saying they were too high and hurting the housing market.
“Keeping interest rates high will be detrimental to American workers and their families and do little to bring down prices or promote moderate economic growth,” said Sen. Sherrod Brown, a Democrat from Ohio, and the chairman of the Banking Committee, in a letter to Powell prior to Wednesday’s Fed meeting.
At the meeting on Wednesday, the Fed kept its benchmark interest rate unchanged in a range of 5.25%-5.5%.
Asked about the letter from the Democrats on Wednesday, Powell said Congress has given the Fed the job of stable prices. High inflation hurts people at the lower end of the income spectrum, he added.
“It’s what society has asked us to do is to get inflation down. The tools we use to do it are interest rates,” he said.
The Fed has penciled in three rate cuts for 2024. Powell said that a cut at the Fed’s next meeting in March was unlikely. He said the Fed wants to see more good inflation reports so it can have greater confidence that inflation is coming down to the 2% target.