"But when asked if Trump's opinions on interest rates would have "equal weighting" with members of the Fed's interest-rate setting committee, Hassett replied, "No, he would have no weight." "His opinion matters if it's good, if it's based on data," Hassett continued. "And then if you go to the committee and you say, well, the president made this argument and that's a really sound argument, I think, what do you think? If they reject it, then they'll vote in a different way.""
"Hassett's comments come as Trump is reportedly in final interviews with potential replacements for the Fed's current chair, Jerome Powell. Trump has emphasized that he expects whomever he nominates to lead the Fed will sharply lower the central bank's key rate, which currently stands at about 3.6%. Trump has said it should be cut to 1% or lower, a view almost no economist shares. Trump's outspokenness has raised concerns about the Fed's independence from day-to-day politics under any chair he appoints."
An incoming Fed chair would present presidential views to Fed officials for their consideration, but officials could reject those views when setting interest rates. Continued private communication between the president and the Fed is expected if a new chair is appointed. The president favors sharply lower interest rates, seeking cuts toward 1 percent, while most economists oppose such deep cuts. The Fed's independence faces renewed scrutiny because of presidential outspokenness. The central bank's key rate currently stands at about 3.6 percent. Traditionally, presidents avoided public or private commentary on Fed decisions to preserve anti-inflation credibility.
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