Trump's Push for Lower Rates: Federal Reserve's Leadership at Stake

U.S. President Trump is set to announce a new Federal Reserve chair who favors significantly lower interest rates. Potential candidates include Kevin Hassett, Kevin Warsh, and Chris Waller. Trump emphasizes the need for lower mortgage rates, despite the limited impact of Fed-controlled rates on long-term borrowing costs.

In a major economic announcement, U.S. President Donald Trump indicated his intent to appoint a new Federal Reserve chair focused on significantly lowering interest rates. During a national address, Trump declared his choice would prioritize bringing down mortgage payments, an area he argues requires action 'by a lot.'

The shortlist for the next Federal Reserve chair includes known figures such as White House economic advisor Kevin Hassett, former Fed Governor Kevin Warsh, and current Fed Governor Chris Waller. While all support lower rates, none have shown willingness to meet Trump's drastic demands for cuts to levels close to 1%.

Though Trump desires reduced mortgage rates, the actual controlled rates impact is modest, with longer-term borrowing costs reacting more to factors like the 10-year Treasury yield. Trump emphasizes a need for the Fed chair to collaborate closely with his administration, breaking from traditional discretion typically granted to the Federal Reserve.