Trump jokes: 'Wash—if you don’t cut rates, I’ll sue'…a quip with an edge

Speech at the private social club 'Alfalfa Club'

Says there was no prior pledge on rate cuts

U.S. President Donald Trump joked that he would “sue” Kevin Warsh, a contender for chair of the Federal Reserve (Fed), if Warsh does not cut interest rates.

According to The Wall Street Journal (WSJ) on the 31st (local time), Trump made the remark in a speech at the Alfalfa Club’s private annual dinner held in Washington, D.C., on the 25th, saying Warsh “looked like the perfect fit for the job of Fed chair.”

The annual dinner speech at the Alfalfa Club—attended by leading figures from U.S. political and business circles—traditionally features open roasting of attendees and self-deprecating jokes. In fact, in his remarks that day, Trump referred to former Senator Mitt Romney, long seen as a standard-bearer of the Republican establishment, as a “leftist.” He also said of Chief Justice John Roberts, “I’m in a position where I have to keep him happy.”

As a result, local media are not taking Trump’s comment—suggesting he would take legal action if Warsh does not cut rates—literally. Trump himself also cut off questions from reporters about what he meant, saying, “It was a joke.” He explained that he did not ask Warsh for any promise regarding rate cuts, adding, “I could have if I wanted to, but I didn’t.”

Still, some argue that Trump’s talk of suing Warsh cannot be dismissed as 100% humor, given that Trump has been openly voicing dissatisfaction with Fed Chair Jerome Powell, whose term ends in May.

The Fed cut rates three times last year. But at this year’s first regular Federal Open Market Committee (FOMC) meeting, it held the benchmark rate steady in the 3.5–3.75% range.

After the Fed’s decision to keep rates unchanged, Trump launched a blistering attack on Powell, saying he was “undermining our national security.” Trump has insisted the benchmark rate should fall to 1% or lower.

Park Subin, Hankyung.com reporter waterbean@hankyung.com