Trump backs Kevin Warsh but accuses Fed board of being ‘very political’ over high interest rates

WASHINGTON, DC: President Trump expressed confidence in Federal Reserve boss Kevin Warsh on Wednesday, Sept 16, as he assailed the rest of the Fed’s board for keeping interest rates far too high. Despite his support for Warsh, Trump attacked most of the Federal Reserve as politically motivated and out of tune with the economy.

Trump blames the Fed for dampening the economy by keeping interest rates artificially high and claims the US should have the lowest possible interest rates given its economic position in the world.

Trump claims that he can rely on Kevin Warsh

Asked directly whether he retains confidence in Warsh, Trump said, "Yeah, I do. I mean, I'm relying on Kevin, but he's got, you know, a very tough board. He's got a board that was put there by a lot of other people. And the interest rates are too high, they're not appropriate."

Trump said he personally advised Warsh on the best course of action regarding his differences with the rest of the board, arguing that there wasn't much to gain by going against the majority.

"I talked to Kevin, and I said, 'You might as well vote with the board because it's just not going to matter,'" Trump said.

Trump saved his sharpest criticism for the board as a whole: "The board is very hostile. They're very political. They're doing the wrong thing.”

“They're a bunch of politicians or people put on by politicians, and it's a shame because it's too high an interest rate," he said, adding, "Despite that, the country battles through everything because we're doing so well, but the interest rates are too high."

Trump boasts of US Economy

Trump argued that the US economy and credit market dominance should allow Americans to have the lowest interest rates in the world.

"We should be paying the lowest interest rate anywhere in the world because we have the strongest credit," he said, before floating a broader plan to address the national debt.

"If we wanted to get rid of deficits, which we could do with a swipe of a pen with every country, we'd make a trillion and a half dollars a year. We'd pay off our debt, we'd do all sorts of things," Trump said. "But we haven't chosen to do that, but at some point we will. Interest rates are too high."

The comments are the latest chapter in a long saga in which Trump has accused the Fed of distorting interest rates, and has threatened to take action against the central bank whenever it doesn’t comply.

He still has great confidence in Warsh, but the president’s attacks on the whole board as “hostile” and “political” suggest continuing tensions with the central bank about monetary policy.