Speaking before the World Economic Forum in Davos, Switzerland, Trump said he’ll call for interest rates to be lower than current levels. A possible sign he is setting up a possible battle with the Federal Reserve.
Kevin Hassett, the director of the National Economic Council, is set to serve as the Trump administration’s key point of contact with the Federal Reserve Chair Jerome Powell as the fight against inflation continues.
Hassett appeared on CBS News’ “Face the Nation” on Sunday and told host Margaret Brennan that he is planning to hold regular lunch meetings with Powell and other central bank policymakers.
“I, just this weekend, have arranged to begin, once again, regular lunches with Jay Powell at the Federal Reserve,” Hassett said. “Jay and I have a long and collegial relationship, and I’m going to go over there with him and the other governors.”
“So, we’re going to talk about our views about what’s going on, and listen to his and that collegiality has been going on for four years when I was here before, and the president very much values that,” he said.
TARIFFS COULD FACTOR INTO FED’S RATE-CUT PLANS AMID INFLATION CONCERNS, EXPERTS SAY
Kevin Hassett, the director of the National Economic Council, will serve as a key point of contact for the Trump administration with the Federal Reserve. (Mark Wilson/Getty Images / Getty Images)
Brennan began to ask Hassett whether those meetings are aimed at influencing the Federal Reserve’s decisions on monetary policy when he replied that “Jay is an independent person” and that the independence of the Fed is respected.
“The point is, the president’s opinion… can be heard. He’s the president of the United States. But here’s the thing that I think is interesting, that if we get inflation under control, then that takes pressure off the Fed,” Hassett said.
“One way to tell whether markets think, ‘are we getting inflation under control,’ is to look at longer term interest rates that the Fed doesn’t affect directly. And if you look at it, the 10-year Treasury rate has dropped about 40 basis points over the last couple of weeks while we announced our plan to control inflation. That saved the American people about $40 billion… just from talking about the stuff that we’re about to do,” he added.
INFLATION RISES 3% IN JANUARY, HOTTER THAN EXPECTED
Fed Chair Jerome Powell has signaled the Fed isn’t in a hurry to cut interest rates and will continue to evaluate fresh economic data. (Alex Wong/Getty Images / Getty Images)
President Donald Trump has repeatedly criticized Powell and called for the Fed to lower interest rates. While Powell was testifying before Congress about monetary policy, Trump once again posted that the central bank should lower interest rates.
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!!” Trump said in a post on Truth Social. “Lets Rock and Roll, America!!!”
Powell’s testimony reiterated his stance that the Fed doesn’t need to “hurry” to lower interest rates as it waits for more data showing that inflation is trending back toward its 2% target rate as the central bank pursues its dual mandate of stable prices and maximum employment.
TRUMP SAYS HE WON’T FIRE FED CHAIR JEROME POWELL
President Donald Trump nominated Jerome Powell to serve as Federal Reserve chair in 2017. (SAUL LOEB/AFP via Getty Images / Getty Images)
“We do not need to be in a hurry to adjust our policy stance,” Powell told the Senate Banking Committee on Tuesday. “We know that reducing policy restraint too fast or too much could hinder progress on inflation. At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment.”
The Fed left interest rates unchanged at its most recent policy meeting in January amid stubborn inflation and a resilient labor market, with policymakers saying they are waiting for data showing inflation is trending lower.
The consumer price index (CPI) – a popular inflation gauge – came in hotter than expected last week at an annual rate of 3% for January. That figure was up from 2.9% a month ago, though it’s down from 3.1% in January 2024.
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Core CPI also ticked higher by 0.1 percentage from last month to 3.3% on an annual basis. That metric was 3.9% in January 2024.
