‘Whatever’: Trump now OK with Fed holding or raising rates as long as Powell not chair

Key Points:

• President Donald Trump has softened his stance on Federal Reserve interest rate policies, expressing acceptance of keeping rates steady or even raising them under new Fed Chair Kevin Warsh, whom he appointed as Jerome Powell's successor.
• The Fed's Open Markets committee, under Warsh's leadership, recently kept interest rates unchanged but signaled potential rate hikes later this year due to persistent inflation, marking a shift from earlier forecasts that predicted cuts in 2026.
• Trump praised Warsh's independence and leadership at the Fed, a notable reversal from his prior criticism and attacks on Powell for resisting politically motivated rate cuts to stimulate the economy.
• During his presidency and 2024 campaign, Trump aggressively criticized Powell and the Fed for not lowering rates, including attempts to influence the Fed's board composition and investigations into Powell, actions that raised concerns about political interference.
• Warsh began his four-year term as Fed Chair on May 22, with Trump emphasizing the importance of the Fed's independence and its role as a pillar of the global financial system.