President Donald Trump said in an interview that the next Federal Reserve chair should consult with him on interest rate decisions, describing the practice as routine in earlier eras and arguing that presidential input should again be part of the process.
"Typically, that's not done anymore. It used to be done routinely. It should be done," Trump said. "It doesn't mean I don't think he should do exactly what we say.
"But certainly I'm a smart voice and should be listened to."
Trump said he is leaning toward either National Economic Council Director Kevin Hassett or a former Federal Reserve governor, Kevin Warsh to succeed Chair Jerome Powell, whose term expires in May.
Trump nominated Powell during his first term but has since repeatedly criticized his approach to interest rates.
Trump also reiterated his preference for sharply lower rates, saying he would like to see interest rates at 1% or lower by this time next year.
"We should have the lowest rate in the world," he said.
The Federal Reserve approved a quarter-percentage-point rate cut earlier this week following a narrow, divided vote, as policymakers debated the risk of easing too quickly.
At the same time, inflation remains above the Fed's 2% target.
Several officials cited uncertainty over inflation trends and employment data as reasons for caution.
Kansas City Fed President and CEO Jeffrey Schmid said he opposed the rate cut because inflation was "too hot" and argued that monetary policy should remain "modestly restrictive" to address persistent price pressures.
Trump has frequently said that rates should be lowered more aggressively to reduce borrowing costs for consumers, businesses, and the federal government.
He has publicly criticized Powell for what he views as delays in easing policy, renewing those attacks even after multiple rate cuts this year.
Federal Reserve officials, including Powell, have consistently defended the institution's independence and said monetary policy decisions must be driven by economic data rather than political considerations.
Powell has said the Fed's mandate remains focused on price stability and maximum employment.
Powell has previously said that the central bank's ability to set interest rates "free of political interference" is necessary to serve the economy rather than any political agenda, noting that the Fed is "supposed to achieve maximum employment and price stability for the benefit of all Americans and keep out of politics completely."
Reuters and The Associated Press contributed to this report.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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