Trump would not reappoint Powell as Fed chief

(Reuters) – Former President Donald Trump said he would not reappoint Federal Reserve Chair Jerome Powell if Trump wins this year’s presidential election, the Republican frontrunner told Fox Business in an interview aired Friday.

“No I wouldn’t,” Trump said in response to a question on whether he would reappoint Powell, whose second four-year term as chair will expire in 2026.

Trump said he believes Powell is going to lower interest rates to help President Joe Biden’s prospects for re-election.

“I think he’s going to do something to help the Democrats, if he lowers interest rates,” Trump said.

Powell and the Fed signaled on Wednesday that they were done with rate increases and they were now waiting to have greater confidence in inflation falling to their 2% target before cutting rates, something Powell said was likely to happen this year.

Biden, a Democrat who beat Trump in the 2020 White House race, reappointed Powell to a second term in 2021.

Trump tapped Powell in 2017 to lead the U.S. central bank but the Republican president turned against him soon after his February 2018 swearing-in.

In the months that followed, Trump frequently attacked Powell and the Fed for raising borrowing costs, especially as U.S. stocks tumbled and yields on U.S. government debt began to signal a possible recession ahead.

Trump warned of “massive inflation” if tensions in the Middle East drive up oil and energy prices.

Attacks on shipping vessels by Iranian-backed Houthi rebels in the crucial Red Sea shipping lane have disrupted shipping in the Suez Canal, the fastest sea route between Asia and Europe.

If the Red Sea remains closed for an extended period it will force LNG tankers and other vessels to take the longer route around the Cape of Good Hope in South Africa, adding to costs and voyage durations.