August M
President Donald Trump says a key economic announcement is imminent, raising fresh questions about the future direction of US monetary policy.
The decision comes amid mounting tensions between the White House and the Federal Reserve over interest rates and the independence of the central bank.
According to Reuters, Trump said he will announce his nominee for Federal Reserve chair on friday morning.
Announcement coming
Speaking to reporters late Thursday, Trump said he had already made his choice.
“I’ve chosen a very good person to head the Fed,” he said, calling the nominee an “outstanding person” who is “very respected” and “known to everybody in the financial world.”
The president did not name his pick but has previously indicated, that two candidates are leading the race, CBS News reports
Two leading names
Trump has said the front-runners include White House National Economic Council Director Kevin Hassett and former Federal Reserve board member Kevin Warsh.
“The two Kevins are very good,” Trump told Reuters earlier this month, while suggesting other candidates could still be considered.
What Trump has made clear is the quality he wants most in the next Fed chair: a willingness to cut interest rates more aggressively.
Clash with Powell
Trump has repeatedly criticised current Fed Chair Jerome Powell for what he sees as an overly cautious approach to lowering rates, arguing that faster cuts would boost growth and reduce borrowing costs.
In recent months, Trump has called Powell a “stubborn mule” and “Mr. Too Late,” and has openly mused about firing him. Powell’s term as chair ends in May, though he could remain on the Fed’s board until 2028.
Tensions escalated earlier this month after Powell disclosed that the Justice Department had issued subpoenas related to his testimony on a costly renovation of the Fed’s Washington headquarters.
Powell described the investigation as an attempt to intimidate the Fed and undermine its independence.
Senate hurdles ahead
The subpoenas could complicate Senate confirmation of a new Fed chair. Several Republican senators have criticised the investigation, with Senator Thom Tillis saying he would oppose new Fed nominees until the legal matter is resolved.
If confirmed, Trump’s pick would expand his influence over the central bank, though the chair holds only one vote on the 12-member committee that sets interest rates.
Trump himself previously appointed Powell, underscoring that even handpicked chairs do not always follow presidential preferences.
Sources: Reuters, CBS News
