Trump claimed that his nominee for Federal Reserve Chair, Kevin Warsh, could drive the U.S. economy to achieve 15% growth. This highly optimistic goal highlights the immense pressure Warsh would face if appointed. Trump also criticized the appointment of Powell as a major mistake.
U.S. President Trump stated that his nominee for Federal Reserve Chair, Kevin Warsh, could stimulate economic growth to reach 15%. This target is extremely optimistic but also underscores the pressure Warsh would face if confirmed for the position.
In an interview with Fox Business, Trump said that Warsh was the 'runner-up' in his previous selection for Federal Reserve Chair and called the choice of Jerome Powell for the role a significant error.
In an excerpt from an interview aired on Monday, Trump told host Larry Kudlow (a former senior advisor in Trump’s first administration), 'If Warsh performs to his potential, we can achieve 15% growth, and I believe even more.' He added, 'I think he will be excellent; he is indeed a highly qualified candidate.'
It remains unclear whether Trump was referring to year-over-year growth or another metric. The U.S. economy is expected to grow by 2.4% this year, with an average annual growth rate of about 2.8% over the past five decades. Since the 1950s, U.S. GDP growth has exceeded 15% only a few times, including in the third quarter of 2020 when businesses reopened after pandemic-related closures.
During his earlier search for a new Federal Reserve Chair, Trump expressed a preference for a candidate who would lower interest rates. He later said he would not choose Warsh if he advocated for raising rates.
These remarks clearly indicate that Trump is betting on Warsh (if confirmed) to boost economic growth before the midterm elections, which have historically been unfavorable for U.S. presidents. These comments also suggest that Warsh could face a precarious situation if appointed.
These statements also indicate that Trump is not concerned about inflation. Any growth rate close to 15% would typically lead to a spike in inflation, yet inflation levels remain stubbornly high.
According to the median estimate in the Summary of Economic Projections released in December last year, Federal Reserve officials only plan to implement one rate cut in 2026, although investors still anticipate two rate cuts this year.
In a brief excerpt aired on Monday, Trump said it was former Treasury Secretary Steven Mnuchin who strongly urged him to choose Powell at the time.
Trump said of Powell, 'My Treasury Secretary really, really wanted him. I didn't feel good about him, but sometimes you listen to other people, and it was a mistake, a big mistake.' Trump's full interview is expected to air on Tuesday.
Powell was reappointed during Biden’s administration but has since become a target of Trump’s criticism. Trump has strongly pushed for lower interest rates and broken decades-long precedent by questioning the independence of the Federal Reserve.
This campaign could delay Wash's arrival. Republican Senator Thom Tillis of North Carolina, who is set to retire, has vowed to block any Federal Reserve nominations as long as the Trump administration continues its investigation into Powell.
Editor/Melody
