Trump expects his Fed pick to cut interest rates right away

President Donald Trump wants his pick to lead the Federal Reserve next year to lower interest rates immediately.

Asked by Politico if slashing borrowing costs is a litmus test for him, the president quickly responded "yes."

"We’re fighting through interest rates," Trump said, according to a Politico transcript published Tuesday. He went on to bash Federal Reserve chair Jerome Powell and described him as "not a smart person" and someone who "doesn't like Trump."

It's the latest comment from Trump indicating he's inclined to pick a replacement for Powell that he believes aligns with his views on supercharged rate cuts. With Powell's term up in May 2026, senior Trump administration officials have been carrying out an interview process for the next Fed chair. It's been led by Treasury Secretary Scott Bessent.

Five candidates have been in the running: Fed Governors Christopher Waller and Michelle Bowman, ex-Fed Governor Kevin Warsh, Blackrock investment executive Rick Rieder, and White House National Economic Council Director Kevin Hassett.

Hassett, though, is widely viewed as the frontrunner at the moment. Last week at the White House, Trump said "we have it down to one" and strongly suggested it was his top economic aide.

Hassett has robustly advocated for lower interest rates, falling in line behind the president. He said on Tuesday at the WSJ CEO summit that "there’s plenty of room" to reduce borrowing costs at the moment, arguing that the U.S. is in "a potentially extremely transformative time.”

Fed policymakers are gathering on Tuesday and Wednesday for their final rate-setting meeting of the year. Investors and financial analysts widely expect they will settle on a quarter-rate point cut, their third of the year. But it probably won't be enough to placate Trump, who has kept up intense attacks against the Fed for much of the year.