Trump Signals Rate Cuts Under Potential Fed Chair Warsh

U.S. President Donald Trump has reignited rate-cut expectations in financial markets with pointed remarks about the future leadership of the Federal Reserve. Speaking to NBC News, Trump said he has little doubt that the Fed would lower interest rates under a potential new chair, Kevin Warsh. According to Trump, Warsh understands his preference for low rates, adding that a candidate who advocated rate hikes “would not have gotten the job.”

The comments come as the term of current Fed Chair Jerome Powell is set to expire in May. During Powell’s tenure, Trump repeatedly criticized the central bank and publicly pressed for deeper rate cuts. Warsh, a former member of the Fed’s Board of Governors, has recently aligned himself with calls for a more accommodative stance, further reinforcing market expectations. His nomination, however, would still require confirmation by the U.S. Senate.

For markets, the key issue is less the individual appointment and more the implicit political influence over monetary policy. Investors interpret Trump’s remarks as a signal that a future Fed leadership could pursue a more growth- and market-friendly rate path. As a result, rate-sensitive segments—including technology and growth stocks as well as interest-sensitive real estate and financial names—have drawn renewed attention.

At the same time, the comments have unsettled parts of the bond market. Analysts warn that overt political pressure on the central bank could undermine confidence in the Fed’s independence, potentially leading to higher risk premiums, increased yield volatility and greater uncertainty in U.S. Treasury markets.

In the near term, however, expectations of looser monetary policy are dominating market sentiment and supporting risk assets. Whether these expectations materialize will depend not only on the leadership decision but also on inflation trends, economic data and the Senate confirmation process. For investors, the Fed succession has thus emerged as a key market catalyst for the months ahead.

SK