Trump and the Federal Reserve are on a collision course over interest rates

President Donald Trump berated Jerome Powell for years as he sought to pressure the then-Federal Reserve chairman to cut interest rates. So far, he’s given a pass to the new Fed chief, Kevin Warsh, whom Trump nominated earlier this year.

Now, not even four months into Warsh’s tenure, the honeymoon might be over. The president has ratcheted up his calls for an interest rate cut in recent weeks, setting the stage for a potential showdown after Wednesday’s decision from Fed policymakers.

Warsh faces a “time to choose,” as economists at UBS put it: Will the Fed hold its key rate steady yet again in the face of rising inflation, or will the central bank increase the rate to battle stubbornly high prices — and potentially enrage the president?

Trump adviser Kevin Hassett, chair of the National Economic Council, said he thinks the “president will have something to say about it” if the Fed makes a “big move” with rates. (Hassett was a candidate for the Fed job before Trump picked Warsh.)

“The president will have an opinion about it,” Hassett told CNBC on Friday. “I’m sure he believes that there’s plenty of room for interest rates to go down, and…

Original source: https://www.nbcnews.com/business