House Speaker Johnson expects "rocky road" for Fed Chair Powell
/ CBS News
Washington — House Speaker Mike Johnson said he understands President Trump's frustration with Federal Reserve Chair Jerome Powell, but reiterated that he's uncertain about "what the legal parameters are" if the president fires him.
Mr. Trump has lashed out at Powell, accusing him of not acting quickly enough to slash interest rates — the Fed has currently set a benchmark rate of 4.25% to 4.5%, where it has remained all year. The president has argued that cutting borrowing costs would boost economic growth, but the central bank has worried that slashing rates could make inflation worse. Powell has also cited the uncertainty of economic impacts of Mr. Trump's tariffs as another factor. Mr. Trump has brought up the idea of firing Powell but later said it's "highly unlikely" he would.
"I do believe that he should reduce interest rates, and it's really too much power to be held in the hands of one person or a board," Johnson, a Louisiana Republican, told CBS News' chief Washington correspondent Major Garrett in an interview Wednesday. The decision to raise or lower interest rates is not Powell's alone. Eight times a year, the Federal Open Market Committee, which has 12 members, votes on monetary policy.
Mr. Trump nominated Powell as Fed chair during his first term, and then-President Joe Biden subsequently nominated him for a second four-year term that expires in May 2026.
"It's a rocky road for him between now and then," Johnson said. "I do believe a lot of economists will say, when the economy is hot, when it's running — and ours is, and we're ramping up lots of great development — that that is not a time for you to reduce interest rates. But I think desperate times call for desperate measures."
Johnson said lowering interest rates would help solve the housing affordability crisis.
"If you reduce the rates just a small percentage, you can solve that problem," he said. "I think that would be a big thing for the economy and I think he ought to duly consider that. It would save the nation a lot of money and would give a lot more people more opportunity."
Johnson made the comments a day ahead of Mr. Trump's visit to the Federal Reserve in Washington.
Caitlin Yilek is a politics reporter at CBSNews.com, based in Washington, D.C. She previously worked for the Washington Examiner and The Hill, and was a member of the 2022 Paul Miller Washington Reporting Fellowship with the National Press Foundation.
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