President Donald Trump praised Federal Reserve Board member Christopher Waller after his interview with the candidate for the U.S. central bank’s top job.
Trump met with Waller on Dec. 17 as part of the administration’s process to replace Fed Chair Jerome Powell, whose term expires in May.
“I think he’s great. I mean, he’s been a man who’s been there a long time. Somebody that I was very involved with in the sense of his career, and he’s a fantastic man,” Trump told reporters at the Oval Office on Dec. 18.
Waller—first appointed by Trump to the Board of Governors in 2020—has previously said he would be the right person for the position.
He has also assuaged concerns surrounding the prospect of eroding monetary policy independence.
Experts fear the next central bank chief could repeat Arthur Burns’s 1970s mistake, when political pressure from President Richard Nixon kept interest rates too low for too long—fueling runaway inflation and the stagflation that followed.
However, appearing at the Yale CEO Summit on Dec. 17, Waller said he is committed to defending the Fed’s independence.
“I spent 20 years of my life working on central bank independence and why it was important,” he told CNBC’s Steve Liesman. “I have a long paper trail on this.”
National Economic Council Director Kevin Hassett—the leading candidate to helm the Fed next year—has also reiterated the importance of the institution’s independence.
Hassett, in an interview with CNBC’s “Squawk on the Street” on Dec. 16, stated that it is vital to forge consensus on the rate-setting Federal Open Market Committee (FOMC).
“The Federal Reserve’s independence is really, really important, and the voices of the other people at the FOMC, they’re important too,” he said. “So the way you’ve got to drive interest rate movements is with consensus based on the facts and the data.”
This comes as the president suggested that, given his business experience, the next Fed chair should take his stance on monetary policies into consideration.
“I think I certainly should have a role in talking to whoever the head of the Fed is,” Trump told reporters on Dec. 12. “I’ve done great. I’ve made a lot of money, very successful. I think my voice should be heard, but I’m not going to make the decision based on that. I’ll be making a decision over the next few weeks.”
Monetary officials have stated that it is an institution free of politics and that it focuses only on its dual mandate of maximum employment and price stability, as well as on bank supervision.
Announcement Coming Soon
During his 18-minute prime-time address, Trump said he will soon appoint the next chairman of the Federal Reserve, who will support lowering interest rates “by a lot.”
This month, the Fed followed through on the third consecutive quarter-point rate cut, bringing the benchmark federal funds rate target range to 3.5 percent to 3.75 percent.
Despite inflation coming in below expectations and mixed employment data, investors still think officials will hold the policy rate steady at next month’s meeting, according to the CME FedWatch Tool.
But market watchers say there is little justification to keep monetary policy restrictive after the annual inflation rate slowed to 2.7 percent in November.
“The inflation bump from tariffs is behind us, so the path is now clear for the Fed to lower rates again in January. There is no longer a case for restrictive monetary policy,” Jamie Cox, managing partner for Harris Financial Group, said in a note emailed to The Epoch Times.
Trump, meanwhile, also confirmed to the press that he is speaking with “three or four” individuals, adding that each person “would be a good choice.”
The president also said Fed Vice Chair for Supervision Michelle Bowman—another possible candidate—is “a fantastic person.”
He plans to announce his pick in the next few weeks. The nominee must be confirmed by the Senate.
According to Polymarket, Hassett is the front-runner with a 53 percent chance of securing the nomination as chairman. This is followed by former Fed Board member Kevin Warsh (26 percent), Waller (14 percent), and Bowman (3 percent).
Emel Akan contributed to this report.
Recent Comments