Trump Predicts Interest Rates Will Fall After Fed Chair Pick

Story Highlights
• President Trump said U.S. interest rates will decline after he announces his Federal Reserve chair pick.
• Trump framed the decision as restoring confidence and discipline in monetary policy.
• Markets are closely watching signals around future Fed leadership.

What Happened

President Donald Trump said interest rates in the United States will come down once he announces his choice for the next Federal Reserve chair, according to Reuters. Speaking to reporters, Trump linked future rate cuts to leadership changes at the central bank, arguing that the right appointment would help stabilize markets and support economic growth.

Trump did not name a specific candidate but reiterated long‑standing criticism that current monetary policy has kept borrowing costs higher than necessary. He said his eventual pick would focus on strengthening growth, supporting businesses, and maintaining confidence in the U.S. financial system.

The comments came as investors and policymakers await signals on the future direction of U.S. monetary policy, with interest rates remaining a central issue for markets, housing, and business investment.

Why It Matters

The Federal Reserve plays a decisive role in shaping borrowing costs across the economy. Any indication of future leadership changes can influence expectations around interest rates, inflation control, and economic growth.

Lower interest rates typically reduce costs for consumers and businesses, supporting spending, investment, and job creation. Trump’s remarks reinforce the view that monetary policy leadership will be a key lever in shaping the next phase of the U.S. economic cycle.

Markets often react not only to policy decisions themselves, but to expectations about who will be making those decisions in the future.

Political and Geopolitical Implications

Politically, Trump’s comments highlight the ongoing debate over the balance between Federal Reserve independence and executive influence. Supporters argue that leadership changes can correct policy missteps and better align monetary decisions with economic conditions, while critics warn against politicizing the central bank.

Geopolitically, confidence in U.S. monetary policy underpins the global role of the dollar and international capital flows. Signals suggesting lower rates or policy shifts can affect currency markets, foreign investment, and global financial stability.

International investors will closely watch both the eventual Fed chair announcement and how markets respond to Trump’s guidance.

Implications

If Trump’s Fed chair pick signals a shift toward easier monetary policy, markets could begin pricing in lower interest rates well before any official changes occur. That could influence borrowing, investment decisions, and asset prices across the economy.

However, actual policy outcomes will depend on economic data, inflation trends, and the Federal Reserve’s institutional processes. Until a formal announcement is made, uncertainty is likely to persist — keeping markets sensitive to further signals from the White House.

Source 

• Trump says interest rates will fall after he announces Fed chair pick — Reuters, Jan. 28 2026