Trump Asserts He Holds Deeper Understanding of Interest Rates Than Federal Reserve Chairman Powell

Former President Donald Trump expressed skepticism regarding Federal Reserve Chair Jerome Powell’s decisions on interest rates and mentioned that he intends to communicate with the central bank leader “at the appropriate time.”

“I believe I have a better understanding of interest rates than they do, particularly compared to the individual responsible for making that decision,” Trump stated, seemingly referring to Powell, while addressing reporters from the Oval Office on Thursday. “If I have disagreements, I will make them known.”

When asked if he thought Fed officials would heed his opinions, Trump answered, “Absolutely.”

Trump’s remarks followed his video address to the global elite at the World Economic Forum in Davos, Switzerland, where he pledged to urge Saudi Arabia to lower oil prices and advocated for an immediate reduction in interest rates—actions he claimed would alleviate costs for American consumers and boost the economy.

“As oil prices decrease, it will lead to lower costs for the American public,” Trump told reporters. “As energy prices fall, this will significantly reduce inflation. This will inherently drive interest rates down.”

A surge in energy prices contributed to over 40% of the rise in overall inflation in December; however, the Fed must also tackle price pressures in various sectors of the economy. Excluding food and energy, the consumer price index rose by 3.2% from the previous year.

Traditionally, presidents have avoided direct commentary on the central bank’s policy decisions, but during the campaign, Trump conveyed to Bloomberg News his belief that he should be able to advise Powell on potential adjustments to interest rates.

Powell, who often faced criticism from Trump during the president’s first term, has asserted that the central bank will make rate decisions based solely on economic factors, independent of political influences or external pressure.

After implementing three rate cuts in late 2024, Fed officials are anticipated to maintain current rates until they observe more substantial progress on inflation towards their 2% target.

The next meeting for Fed officials is scheduled for January 28-29 in Washington.

© 2025 Bloomberg

Stay updated with Moneyweb’s comprehensive finance and business news on WhatsApp here.