Economy January 27, 2026

Trump Says Fed Pick Will Be Announced Soon, Predicts Interest Rates Will Fall Under New Leadership

President says a forthcoming Fed chair appointment will lead to significantly lower interest rates; his criticism of Jerome Powell has raised questions about central bank independence

By Avery Klein
Trump Says Fed Pick Will Be Announced Soon, Predicts Interest Rates Will Fall Under New Leadership

President Donald Trump told a rally in Des Moines, Iowa, that he will soon reveal his choice to lead the Federal Reserve and predicted that interest rates will decline substantially once the new chair is in place. Trump continued to criticize current Chair Jerome Powell, whose term ends in May, and repeated claims that the Fed has been slow to loosen policy. Powell has said he was threatened with a Department of Justice criminal investigation over his reluctance to cut rates, and the president's pressure on the central bank has contributed to concerns about its independence and to selloffs in U.S. bonds and the dollar.

Key Points

  • President Trump said at a Des Moines rally he will soon announce his pick for the next Federal Reserve chair and predicted interest rates would fall significantly under the new leader.
  • Current Fed Chair Jerome Powell9s term ends in May; Trump criticized Powell during the rally, calling him "too late Powell."
  • Political pressure on the Fed has coincided with market reactions - notably selloffs in U.S. bonds and weakness in the dollar - highlighting effects on fixed-income and currency markets.

Speaking at a rally in Des Moines, Iowa, President Donald Trump said he will soon name his nominee for the next chair of the Federal Reserve and predicted a notable drop in interest rates under that new leadership. "When we have a great Fed chairman, I think we9re going to have one. I9ll announce it pretty soon... you9ll see rates come down a lot," the president said.

Trump reiterated a position he has voiced repeatedly: that the Federal Reserve has been too slow to ease monetary policy. His comments came as Fed Chair Jerome Powell prepares to leave office when his term ends in May, and Trump indicated an announcement on Powell's successor will be made in the coming months.

During the Iowa appearance the president again criticized Powell, calling him "too late Powell." That criticism follows a recent episode in which Powell said he had been threatened with a criminal investigation by the Department of Justice over his reluctance to cut interest rates. The exchange has intensified scrutiny of the relationship between the White House and the central bank.

Analysts and market participants have expressed concern that sustained public pressure from the president could undermine the Fed's independence. The article's account notes that these concerns have already coincided with a selloff in U.S. bonds and the dollar.

Powell's incoming successor will take over at a time when the president is openly demanding more accommodative policy, according to the remarks at the rally. Beyond the timing of the appointment, the president's statements reinforce his insistence that lower interest rates are both necessary and imminent once new leadership is in place.

The president's remarks in Des Moines are the latest in a string of public comments calling for swifter and deeper rate cuts. They follow Powell's account of being threatened with a DOJ criminal inquiry tied to his approach to monetary policy, an allegation that has added to debate over the proper boundaries between political oversight and central bank independence.

Markets have already reacted to the heightened tensions, with a reported selloff in U.S. government bonds and weakness in the dollar cited in connection with concerns about political influence on monetary policy. How markets and policymakers ultimately respond to the president's forthcoming nomination and continued public pressure remains a source of uncertainty.

Risks

  • Erosion of central bank independence due to sustained public pressure from the president - this risk can affect confidence in monetary policymaking.
  • Heightened market volatility in bonds and currencies tied to political interference concerns - fixed-income and currency markets may remain sensitive to developments.
  • Uncertainty around the timing and stance of the incoming Fed chair - markets and interest-rate-sensitive sectors may face unpredictable policy shifts.

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