Trump says Fed pick Kevin Warsh can get US economy to hit 15% growth
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US President Donald Trump said Mr Kevin Warsh (pictured) was the “runner-up” in his last search and that it was a big mistake to pick Fed chair Jerome Powell.
PHOTO: EPA
WASHINGTON – US President Donald Trump said his pick to lead the Federal Reserve can stoke the economy to grow at a rate of 15 per cent, an exceedingly rosy target that nonetheless underscores the pressure that Mr Kevin Warsh will face if confirmed to the role.
Mr Trump, speaking in an interview with Fox Business, said Mr Warsh was the “runner-up” in his last search and that it was a big mistake to pick Fed chair Jerome Powell.
If Mr Warsh “does the job that he’s capable” of, then “we can grow at 15 per cent, I think more than that”, Mr Trump told host Larry Kudlow, who was a senior aide in the US leader’s first administration, in a clip aired on Feb 9.
“I think he is going to be great, and he’s a really high-quality person.”
It was not fully clear if Mr Trump was referring to year-over-year growth or some other metric.
The US economy, which is forecast to expand 2.4 per cent in 2026, has grown at an average annual rate of 2.8 per cent over the past five decades.
Gross domestic product has risen only at a 15 per cent-plus pace a few times since the 1950s, including in the third quarter of 2020 as businesses reopened following Covid-19-related closures.
Mr Trump said during the search for a new chair that he wanted a candidate who would lower rates, and later said he would not have picked Mr Warsh if he had advocated for increasing rates.
The comments make clear that Mr Trump is betting that Mr Warsh, if confirmed, can fuel the economy ahead of midterm elections that are historically punishing for US presidents.
But Mr Warsh’s Senate confirmation may be delayed, with Senator Thom Tillis, a retiring Republican from North Carolina, pledging to block any Fed confirmation as long as Mr Trump’s administration is pursuing a Department of Justice (DOJ) probe into Mr Powell and a Fed building renovation project.
Mr Kudlow questioned Mr Trump whether the DOJ investigation was worth holding up Mr Warsh’s nomination.
“I don’t know, we’ll have to see what happens,” Mr Trump said. “I’ve been fighting Tillis for a long time, so much so that he ended up quitting.”
Mr Trump, seeming unconcerned about a potential delay, said: “If it happens, it happens.”
His comments in the Fox Business interview signal what could prove to be a high-wire act for Mr Warsh.
The remarks suggest that Mr Trump is unconcerned about inflation, which would typically soar under growth rates anywhere near 15 per cent and has remained stubbornly elevated.
Fed officials pencilled in just one interest-rate cut for 2026, according to the median estimate in projections released in December, though investors still expect two reductions in 2026.
In the brief clip aired on Feb 9, Mr Trump said it was former Treasury secretary Steven Mnuchin who pushed to pick Mr Powell.
“My secretary of the Treasury wanted him so badly, so badly,” Mr Trump said of Mr Powell. “And I didn’t feel good about him, but sometimes you listen to people, and it was a mistake, it was really a big mistake.”
The US leader’s full interview is set to air on Feb 10.
Mr Powell was reappointed under former president Joe Biden, but has since become a target of Mr Trump, who has pushed heavily for lower rates and broken with decades of precedent by questioning the independence of the Fed. BLOOMBERG
