Trump makes another bold claim: The Fed Chair I support, Powell, has the ability to boost the US economy by 15%!

U.S. President Trump recently stated that the Fed Chair he nominates could achieve a 15% growth rate for the U.S. economy. This goal is extremely optimistic but also highlights the immense pressure will face if confirmed by the Senate.

During an interview, Trump said that Wosh was his “second choice” when he last selected a Fed Chair, and that choosing Jerome Powell as Fed Chair was a major mistake.

“If Wosh can fully utilize his abilities in office, the U.S. economy could grow by 15% or even higher. I believe he will do an excellent job; he is truly an outstanding person,” Trump said in a clip aired on Monday. The full interview will be broadcast on Tuesday.

It is not entirely clear whether Trump was referring to year-over-year growth or other metrics. The U.S. economy is expected to grow 2.4% this year, with an average annual growth rate of 2.8% over the past fifty years. Since the 1950s, there have been few instances of GDP growth exceeding 15%, including in Q3 2020 when businesses restarted after the COVID-19 lockdown.

During his search for a new chair, Trump indicated he would choose a candidate supportive of rate cuts. He ultimately nominated former Fed Governor Kevin Wosh as the next Fed Chair, and considering Wosh’s previous hawkish stance, markets worry that the path to rate cuts might come to a halt.

In response to market concerns, Trump stated last week that if his nominee for Fed Chair has ever expressed a desire to raise rates, that person would not get the job. He also said he has no doubt that rates will “be lowered very soon.”

These remarks clearly show that Trump believes Wosh, if successfully appointed, could inject growth into the U.S. economy before the midterm elections — which have historically been a tough test for sitting U.S. presidents.

At the same time, this also means Wosh’s future tenure will be as precarious as walking a tightrope, requiring a balance amid multiple pressures.

These comments also indicate that Trump is not worried about inflation. Typically, when economic growth reaches or approaches 15%, inflation tends to rise sharply, yet U.S. inflation remains high.

According to the Fed’s economic forecast released last December, officials’ median expectation is only one rate cut by 2026. However, investors still anticipate two rate cuts this year.

In the interview clip aired on Monday, Trump also revealed that former Treasury Secretary Steven Mnuchin strongly supported nominating Powell as Fed Chair.

“My Treasury Secretary was very, very eager for him (to be Fed Chair). I didn’t have a good feeling about him at the time, but sometimes you follow others’ advice, and it turns out to be a mistake — that was indeed a serious mistake,” Trump said when discussing Powell.

Powell was reappointed during President Biden’s administration and has faced criticism since Trump took office. Trump exerted intense pressure on the Fed to cut rates, breaking decades of precedent and challenging the Fed’s independence.

Last month, Powell disclosed that federal prosecutors are investigating his testimony to Congress regarding the Fed’s Washington headquarters renovation project. He responded in a video that this investigation is “an excuse,” aimed at further pressuring the Fed and undermining its political independence.

Trump’s pressure on the Fed may delay Wosh’s appointment process. North Carolina Republican Senator Thom Tillis has explicitly promised that as long as the Trump administration is investigating Powell, he will block all Fed-related nominations.

The day before, Trump also made bold predictions about the stock market outlook. He said he expects the Dow Jones Industrial Average to reach 100,000 points (doubling from current levels) before he leaves the White House in January 2029. Trump credited his tariff policies for the stock market’s rise and claimed he has “been right about everything.”

(Source: Caixin)