Donald Trump wants a 'say' in setting interest rates

Former President Donald Trump said Thursday that he would like a "say" in setting interest rates if he is reelected, further raising the prospect that the Republican nominee could seek to reduce the independence of the Federal Reserve if he wins in November.

"I feel the president should have at least say in there, yeah, I feel that strongly," the presidential candidate said in response to a question about the US central bank interest rate policy and the prospects of a soft landing for the US economy.

The brief comments came near the end of a news conference Thursday at his Mar-a-Lago club in Florida.

PALM BEACH, FLORIDA - AUGUST 08: Republican presidential candidate former President Donald Trump speaks during a press conference at Mr. Trump's Mar-a-Lago estate on August 08, 2024, in Palm Beach, Florida. Polls currently show a close race between Trump and Democratic presidential candidate, U.S. Vice President Kamala Harris.  (Photo by Joe Raedle/Getty Images)
Republican presidential candidate former President Donald Trump speaks during a press conference at his Mar-a-Lago estate on Aug. 8 in Florida. (Joe Raedle/Getty Images) (Joe Raedle via Getty Images)

The comment also came after allies of the former president have floated a series of ideas in recent months that could undercut an independent Federal Reserve, ranging from firing Federal Reserve Chair Jerome Powell to a plan first reported in the Wall Street Journal that has the president himself playing a role in setting interest rates.

Trump has previously said he thinks he has the authority to fire the Federal Reserve chair, though some legal experts disagree.

Read more: How much control does the president have over the Fed and interest rates?

But this week's comments were the strongest indication yet that Trump does, in fact, want some direct involvement with the central bank operations if he were to reach the Oval Office again.

"In my case, I've made a lot of money. I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman," Trump said this week.

Trump also offered some new criticism of the Federal Reserve Chairman Jerome Powell Thursday, saying Powell and his colleagues have "gotten it wrong a lot."

"He's tending to be a little bit late on things. He gets a little bit too early and a little bit too late."

Trump has also spent much of 2024 turning up the political pressure on the Federal Reserve as policymakers make it clear they are getting closer to cutting interest rates.

Trump has signaled he will criticize any rate cuts before the election, saying in a recent Fox Business interview, "I think [Powell's] going to do something to probably help the Democrats."

And in an interview with Bloomberg published last month, the Republican nominee again reiterated that central bank officials should not ease monetary policy before the November election.

"It's something that they know they shouldn't be doing," he said.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

WASHINGTON, Jan. 24, 2018 -- File photo taken on Nov. 2, 2017 shows U.S. President Donald Trump (L) and Federal Reserve Governor Jerome Powell at a nomination ceremony at the White House in Washington D.C., the United States. U.S. Senate confirmed Jerome Powell as the next chairman of the Federal Reserve on Jan. 23, 2018. (Xinhua/Yin Bogu via Getty Images)
Then-President Donald Trump and Federal Reserve Governor Jerome Powell at a 2017 ceremony at the White House after Trump nominated Powell to be the next chairman of the Federal Reserve. (Xinhua/Yin Bogu via Getty Images) (Xinhua News Agency via Getty Images)

Trump, in his Bloomberg interview, said he would "let" Powell serve out his term and added: "especially if I thought he was doing the right thing."

Powell was asked last month during his testimony before Congress if he intended to stay through the end of his term as chair in May 2026, and he gave a one-word answer: "Yes."

When asked if he would stay longer should he be reappointed as chair, he said, "I have nothing on that for you today."

Powell's full term as a member of the Fed's board of governors doesn't end until 2028 but his time atop the Federal Reserve as chair ends sooner, in 2026.

Stephen Moore, a top Trump confidant, said during an appearance last month on Yahoo Finance's Opening Bid podcast that when Powell's term expires, "then we would look for someone new, maybe a Judy Shelton or a Larry Kudlow or an Arthur Laffer or somebody who's more in line with his economic philosophy."

And in her own Yahoo Finance appearance, Shelton questioned whether the Federal Reserve should exist and argued that a rate cut before the election would be inherently political.

“It is too prominent,” the one-time nominee by Trump to join the Federal Reserve board in 2020 said of the central bank. “We shouldn’t be talking about the Fed’s next move."

Trump on Thursday also acknowledged a rocky relationship with Powell, whom he elevated to Fed Chair in 2018.

He often weighed in to pressure Powell to lower rates while he was president and even contemplated firing Powell before deciding against it.

"I had it out with him a couple of times very strongly," Trump said.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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