With interest rate cuts on the horizon and the economy poised to turn a corner after its postpandemic malaise, former President Trump is warming to Federal Reserve Chair Jerome Powell, an official he has frequently criticized after nominating him for the top spot at the U.S. central bank in 2017.
“I would let him serve it out,” Trump said regarding Powell’s Fed chair term in an interview with Bloomberg published Tuesday, “especially if I thought he was doing the right thing.”
Trump warned the Fed should hold off on interest rate cuts, which are widely viewed as being economically stimulative, before the November election, Bloomberg reported.
“It’s something that they know they shouldn’t be doing,” he said, according to Bloomberg.
Powell said Monday he wasn’t intending on leaving his position as Fed chair before his term expires in 2026, according to the Reuters news agency. That could mean a repeat of the hostility between the Fed and the White House if Trump wins a second presidential term.
The tide of criticism aimed at the Fed during Trump’s first term represented a new norm for the agency, which has long stressed its fundamental independence and sees itself as above the fray of day-to-day politics.
Trump started blasting Powell almost as soon as he took office, as the Fed began interest rate hikes between 2017 and 2019.
Trump even weighed firing Powell, Reuters reported in 2018, though White House officials said Trump conceded that he probably didn’t have the authority to let him go.
In February, Trump said he would not reappoint Powell for another term and accused him of being “political.”
“It looks to me like he’s trying to lower interest rates for the sake of maybe getting people elected, I don’t know,” Trump told the Fox Business Network’s Maria Bartiromo.
“I think he’s going to do something to probably help the Democrats, I think,” he said.
The monetary policy environment has changed since then. Inflation has fallen below 3 percent on an annual basis, and markets expect two full rate cuts before the end of the year.
Crucially, one of them may come at the Fed’s next meeting in September, two months before the presidential election.