President Trump continued his assault on the chair of the Federal Reserve on Friday, saying he would like Jerome H. Powell to resign. The president, who has berated Mr. Powell for weeks, called the chair a “stubborn mule” who has “Trump derangement syndrome” for his refusal to immediately lower borrowing costs.
“I’d love for him to resign if he wanted to,” the president told reporters in the Oval Office.
Such attacks have become a mainstay in Mr. Trump’s second term in the White House. The president, who elevated Mr. Powell to Fed chair during his first term, has spent the past few weeks castigating him for not moving quickly enough to cut interest rates.
Mr. Trump has long been a fan of low interest rates, which make it cheaper for businesses and consumers to borrow and in turn fuel growth. He cajoled Mr. Powell during his first term when he thought the Fed chair was taking too long to lower rates.
But Mr. Trump’s interest in lower borrowing costs has taken on more significance this time around. He is pushing Republican lawmakers to approve an expensive tax-cut package that would require the United States to sell large sums of debt to finance it.
That goal has become harder — and more expensive — given that interest rates remain elevated in a range of 4.25 to 4.5 percent. Mr. Trump has argued that the government would save “billions” if the Fed lowered interest rates, calling for as much as an immediate 2.5-percentage-point decline.
“We have a guy that’s just a stubborn mule and a stupid person that is making a big mistake,” the president said on Friday. The country is paying more to service its debts “because we have a guy who’s suffering from Trump derangement syndrome, if you want to know the truth,” he added. “He’s not good for our country.”
The Fed has stuck to a “wait and see” approach for months, with officials arguing that they can be patient before acting on further rate cuts because the labor market is still solid and inflation is at risk of flaring up again because of Mr. Trump’s policies. The central bank last lowered borrowing costs in December, after a series of reductions in the latter half of last year.
Divisions between Fed officials have started to emerge however, with two Trump appointees recently making the case for interest rate cuts as early as July. Michelle W. Bowman was recently elevated from her role as governor to head of regulatory issues at the central bank, while the governor Christopher J. Waller is seen as a potential pick to be the next chair.
Mr. Trump recently said that he was choosing among three or four people to replace Mr. Powell, whose term ends in May, and that an announcement would be coming soon.
Other contenders include Kevin Warsh, a former Fed governor who was almost picked to be chair during Mr. Trump’s first term; Treasury secretary Scott Bessent; and Kevin Hassett, a top economic adviser to the president.
Asked on Friday about his interest in the job, Mr. Bessent said he would “do what the president wants, but I think I have the best job in Washington.”
The Fed is supposed to operate independently of the White House in order to ensure that officials can make tough choices on interest rates to keep inflation stable and the labor market healthy.
Speaking with lawmakers this week, Mr. Powell repeatedly stressed that politics did not factor into the Fed’s thinking on interest rates. Those decisions are guided by the economic data, he said.
Mr. Trump has long sought to have a greater say over the direction of interest rates, and has repeatedly toyed with removing Mr. Powell as chair before his term expires. The Supreme Court recently signaled that the president was not authorized to do that, however. Mr. Powell’s term as a governor does not expire until 2032, meaning he could technically stay on even after stepping down as chair.
Mr. Bessent acknowledged that on Friday, saying, “Chair Powell doesn’t have to leave.” The next vacancy is set to open up at the end of January when Adriana Kugler’s term as governor ends. If the administration chose to fill that spot with the next designated chair, Mr. Bessent told CNBC, the nomination process could be completed in October or November.
That timing is more in line with how it has been done historically. Selecting a replacement as early as the summer would risk muddying the Fed’s communications and disrupting financial markets.
Mr. Trump said on Friday that he expected whomever he picked to lower interest rates.
“If I think somebody’s going to keep the rates where they are, or whatever, I’m not going to put them in,” he said.
Colby Smith covers the Federal Reserve and the U.S. economy for The Times.
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