Pressuring Warsh for Rate Cuts? Trump Jokes: Warsh Can Work from the White House

On Thursday, U.S. President Donald Trump pressured for interest rate cuts when referring to Kevin Warsh, who has been nominated as the next Federal Reserve chairman. Trump jokingly stated, "If Warsh is appointed Fed chairman, he can even work directly from the White House." He then retorted, "What reason is there not to cut rates now?" to emphasize the necessity of implementing a loose monetary policy. These remarks are seen as an illustration of the continued political pressure from Trump for interest rate cuts amid ongoing controversies surrounding the independence of the Federal Reserve. Currently, with the ongoing Iran conflict and rising oil prices putting inflationary pressure on the U.S., the swap market currently implies a greater than 50% probability of a Fed rate hike this year. On the same day, Trump again vehemently attacked Fed Chairman Powell, calling him a "fool," while thanking US federal prosecutor Jeanine Pirro and Attorney General Pam Bondi for initiating a criminal investigation into Powell. This occurred during Trump's second meeting this year with his cabinet members. Over the past year, Trump has repeatedly accused Powell of "slow action" for refusing to cut interest rates. Now, Trump is accusing Powell of misconduct in the multi-billion dollar renovation project underway at the Federal Reserve building. Trump stated: There is a fool at the Fed. Who wouldn't cut rates at a time like this? But I want to thank Jeanine Pirro, Pam Bondi, and her team for having the courage to bring this lawsuit. And I believe the contractors responsible for that project are probably among the richest people in the country right now. I don't think it's possible to spend that much money. Three billion, four billion dollars. Nobody knows what it's for. But it's definitely over $3 billion. And by the time they finish, it'll probably be over $4 billion. It might never even get finished unless I take over. If I take over, I'll definitely get it done. But it will never look the way it did before. It won't have those beautiful ceilings anymore, it won't have those amazing walls. Those walls were a foot and a half thick, solid brick. And they tore them down for no reason. However, earlier this week, a senior deputy under Pirro privately admitted that the U.S. Department of Justice had failed to find evidence of criminal wrongdoing by Powell, a fact that has weakened the credibility of Trump's previous accusations. As early as January this year, Trump had expressed his desire to sue Powell because the cost of renovating the old Federal Reserve building had spiraled out of control to over $4 billion, about $1.5 billion more than the initial budgeted cost.