Trump blasts Fed, says bank should have doubled rate cut

President Donald Trump said the Federal Reserve should have slashed interest rates by twice as much after the central bank delivered a third consecutive cut, keeping up his pressure campaign on Chair Jerome Powell.

Trump called the quarter-point cut “a rather small number that could have been doubled, at least doubled,” and criticized Powell on Wednesday as a “stiff” and a “dead head.”

“We have to get a mindset that when a country is doing well, you don’t want to kill the growth,” Trump said at the White House. “That’s what they’re doing. They kill the growth.”

The Federal Open Market Committee voted 9-3 Wednesday to lower the benchmark federal funds rate to a range of 3.5%-3.75%. It also subtly altered the wording of its statement suggesting greater uncertainty about when it might cut rates again. The result marked the first time since 2019 that three officials voted against a policy decision, with dissents on both ends of the policy spectrum.

Trump has moved to assert control over the central bank in his second term, regularly expressing frustration that the Fed has not more aggressively reduced borrowing costs under Powell and searching for a new leader who the president has indicated he expects to deliver rate cuts.

That search is nearing its final stages, with Trump telling reporters Tuesday that he is looking at a “couple different people” for the job but that he already has a “pretty good idea of who I want.”

National Economic Council Director Kevin Hassett is seen as the frontrunner for the post and Trump has repeatedly hinted at that outcome, though the president is known to make surprising personnel decisions and any move is not final until a nomination is announced. Treasury Secretary Scott Bessent has been overseeing the selection process, with Fed Governors Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh and BlackRock’s Rick Rieder among the other finalists.

Trump has said he will soon announce his choice for Fed chair but cautioned that could slip into early 2026, fueling anticipation among markets and investors. Powell’s time as chair is set to end in May, but he can stay on the Board of Governors for two more years.

Trump is slated to begin interviews this week with contenders, the Financial Times reported, with the president and Bessent scheduled to meet Wednesday with Warsh. Trump and Bessent are also expected to hold at least one interview next week, according to the newspaper.

Trump at a rally on Tuesday night delivered another broadside against the central bank’s independence, suggesting that he could seek to oust Fed governors appointed by his predecessor, former President Joe Biden, if their commissions were signed by autopen.

That scenario, however, is unlikely to happen. Governors would be almost certain to challenge in court any effort to invalidate Senate-backed appointments. Presidents finalize an appointment by signing a commission after nominees are approved by the Senate to formalize their assumption of a federal office. 

Trump earlier this year moved to fire Federal Reserve Governor Lisa Cook, citing claims she committed mortgage fraud. Cook has denied wrongdoing and sued to block her removal. The Supreme Court said it would hear oral arguments in the case in January.

Copyright Bloomberg News