Donald Trump’s pick for Fed Chair spurned him in his first meeting since taking the job, declining to cut interest rates despite pressure from the president to do so.
The president appeared baffled after learning of Chairman Kevin Warsh’s decision to keep rates unchanged in his first rate-setting meeting as the central bank’s leader.
“It’s alright, whatever,” Trump told reporters in France, where he is attending the G7 in Paris this week.
The president elaborated on his displeasure when asked about the growing likelihood of a rate hike instead.
“It could happen,” Trump said. “It’s hard to believe. It just keeps our country down. It’s so unusual.”
Trump, 80, refrained from trashing Warsh by name, as he often did his predecessor, Jerome Powell, for most of his second term.
Tuesday marked the fourth straight Fed meeting in which rates were left unchanged. The Fed’s decision was reached in a unanimous 12-0 vote.
Warsh said in a news conference after the meeting that “persistently high prices are a burden for the American people.”
He added, “If I saw somebody in the grocery store, what I would say to them is that we cannot have a very significant effect on particular prices.” He said that it is the Fed’s job “to make sure that those [price] changes in oil or beef or eggs or milk don’t broaden in the economy.”
Stocks, short-term bonds, and gold each took a hit after the Fed’s announcement, according to CNN. The network reports that the DOW fell 507 points, the S&P 500 dropped 1.21 percent, and the tech-heavy Nasdaq Composite fell 1.34 percent.
Warsh vowed to reform the Federal Reserve in his news conference.
“The Fed will deliver price stability,” he said. “The commitment to deliver is strong, unanimous, and unambiguous. And that’s an important message we’ve missed for five years. And we’re going to fix that.”
Warsh, unlike Powell, was not willing to detail the full reasoning behind the Fed’s decision. He instead frequently referred back to the Fed’s brief statement about the economy.
“I’ve got nothing more to say than the statement itself,” he answered once.
He answered at another point, “I can’t do much better than the committee just did. So let me restate it.”
Warsh noted that even the Fed’s statement was shorter than usual.
“It’s a bit shorter, a bit simpler, and it dispenses with some older language,” he said. “That statement just gives you the facts, as best we can judge it.”
While Trump appeared displeased with the first meeting, he indicated he is not ready to put a full-blown public pressure campaign on Warsh just yet.
“We have a very good guy over there now,” Trump said, “so I’m guided by what he wants to do.”
