Trump on the Fed: Former president defends interest rate cut talks, criticizes housing policy

“I think it’s good for a president to speak. It doesn’t mean they have to listen,” Trump said in an interview with Bloomberg News on Monday after an event in the swing state of Pennsylvania.

Trump said he had “dealt” on interest rates with Fed Chairman Jerome Powell during his time in the White House and “it might have had an effect, it might not have had an effect.”

“A president can certainly talk about interest rates because I think I have a very good instinct,” he said. “That doesn’t mean I hold the judgment, but it does mean I should have the right to be able to talk about it like anyone else.”

High interest rates have intensified the focus on decision-making at the Fed as mortgage costs have deterred would-be homeowners. Vice President Kamala Harris unveiled her plan to make housing more affordable last week by offering $25,000 down payment assistance.

Trump called the idea “a big mistake,” saying it would cause a greater housing shortage and drive up home prices.

Still, Trump said, “I might do that” when asked if he would offer anything to potential homebuyers struggling to afford a down payment.

Giving more input to the executive branch would challenge the long-standing practice of allowing the US central bank to conduct monetary policy — namely, by setting interest rates — independently of political actors.

Since the Clinton administration, presidents of both parties have also refrained from commenting on Fed decisions and interest rates more broadly to avoid the misperception — and market fears — that they are trying to influence the central bank.

Trump’s appearance on Monday is part of a multipronged campaign strategy to counter-programme the Democratic crowning of Harris as the presidential nominee, shore up support in swing states, but most importantly to lean on the economy, a problem that polls show. it’s the voters’ point of view and where he held an advantage over President Joe Biden and Harris for most of the 2024 cycle.

Polls showed Harris matching or surpassing him. Before Harris replaced Biden at the top of the Democratic ticket, a central part of Trump’s campaign strategy was stoking the nostalgia voters had shown in polls for the pre-Covid-19 economy he oversaw.

At a press conference earlier this month, Trump said the Fed was “a little too early and a little too late” in adjusting interest rates, and that as a businessman the former president has “better instincts than, in many cases, people who would be in the Federal Reserve or the president.”

He declined on Monday to say who he might name Fed chairman, saying “It’s way too early.” The former president previously said he would not reappoint Powell, whose term as chairman ends in 2026. Trump has attacked Powell in the past, saying the central bank and its chairman have “No guts, no sense, no vision!”

Harris differed from Trump on central bank autonomy, telling reporters earlier this month that he couldn’t agree “more strongly” with his view on Fed independence and that, as chairman, he “doesn’t will never interfere in the decisions the Fed makes.”

History shows that countries that allow politicians to direct monetary policy experience higher inflation. In the US, former President Richard Nixon in the early 1970s pushed then-Fed Chairman Arthur Burns into easier monetary policy, setting off a costly blow-up-depreciation inflationary cycle.

The campaign route

The Republican nominee’s comments on Monday followed a speech on the economy and energy policy during a visit to Pennsylvania, part of a week-long blitz that has taken him to key swing states in an attempt to draw attention from his opponent as what Harris and her party. gathered in Chicago for the Democratic National Convention.

Trump is ramping up his campaign this week, with visits also planned to Michigan, North Carolina and Arizona, and he and his surrogates are planning daily press conferences – an attempt to create a contrast with Harris, who has not given an interview since. . becoming the nominee of her party. Harris pledged to do so by the end of the month.

Trump visited a processing and manufacturing plant in York, Pennsylvania on Monday, outlining his economic agenda. Republican allies have pressed Trump in recent weeks to focus more on issues such as the economy and immigration — seen as political liabilities for Harris.

A Washington Post-ABC News-Ipsos poll released Sunday showed Harris leading Trump 49 percent to 45 percent, but the former president is ahead by nine percentage points on the economy. Trump has vowed to renew expiring tax cuts and impose tariffs on both US allies and adversaries if he is returned to power.