Trump: "I didn’t discuss rate cuts with the incoming Fed chair… it would be inappropriate" [FedWatch]

"It would be inappropriate to seek a promise of rate cuts," he said, while also noting

"He will want rate cuts"

U.S. President Donald Trump said on the 30th (local time) that he did not directly discuss the issue of cutting the policy rate with Kevin Warsh, a former Federal Reserve governor whom he has nominated as the next chair of the Federal Reserve (Fed). He also made clear that obtaining a promise of rate cuts would be "inappropriate."

After a signing ceremony for executive orders held in the Oval Office at the White House, Trump told reporters that when asked whether Warsh had promised to pursue rate cuts if confirmed by the Senate, "No." He added, however, "We’ve talked about that issue, and I’ve watched him for a long time."

"I don’t want to ask him that question. It would probably be inappropriate," he said, adding, "It may be permissible, but I want to keep this process clean and pure." The remarks were interpreted as reflecting an awareness that extracting a prior commitment on the policy direction from a Fed chair nominee could run counter to central bank independence. Even so, Trump added, "He clearly wants rate cuts."

Trump’s comments came shortly after he formally nominated the former Fed governor as his pick for Fed chair earlier that day. Warsh will have to go through the Senate confirmation process.

Still, there are questions about whether the confirmation will be smooth. Republican Sen. Thom Tillis of North Carolina said on X (formerly Twitter) that while he viewed Warsh as a "qualified candidate with a deep understanding of monetary policy," he would oppose confirming a Fed chair nominee "until" the Justice Department’s criminal investigation into current Fed Chair Jerome Powell is "fully and transparently concluded."

In response, Trump criticized Tillis, saying, "Because of that kind of thinking, he’s no longer a senator." Referring to Tillis’ retirement, he said, "He’ll be leaving soon," adding, "I personally liked him, but he made a few unwise choices." Trump called Tillis an "obstructionist," saying, "If they won’t approve, you just wait until someone who will approve comes in."

Trump also commented on the investigation surrounding Powell. Taking issue with the renovation of the Fed’s headquarters building, he claimed it was either "total incompetence, or theft." He said he had heard the project would cost $3 billion to $4 billion, adding, "He’s either incompetent, or he himself or someone is a fraudster." He did not, however, clearly state whether the investigation should continue.

New York=Shin-young Park, correspondent nyusos@hankyung.com