President Donald Trump on Saturday night defended a joke in which he said he would sue his Federal Reserve chair nominee Kevin Warsh if he didn’t lower interest rates, according to the Wall Street Journal.
“It’s a roast,” Trump told the Journal in response to a question about his joke, stressing that he did not receive any guarantees from Warsh that he would lower interest rates if he took the role of Fed chair. “I could have done that I guess if I wanted, but I didn’t.”
The Hill separately reported that Trump stressed to reporters that the joke “was all comedy.”
Newsweek reached out to the White House by email outside of normal business hours on Sunday for comment.
Why It Matters
Trump has feuded with current Fed chair Jerome Powell, most recently over his strong reluctance to cut interest rates as Trump views necessary to help boost the U.S. economy. Powell, whom Trump appointed to the role during his first administration, has faced relentless criticism from the president over the past year: Trump at one point even threatened to sue Powell over his “grossly incompetent” handling of D.C. renovations.
The Department of Justice (DOJ) has issued subpoenas and threatened Powell with a criminal indictment over his Senate testimony last June amid the ongoing renovations—an action that Powell has said was a politically motivated act, while Trump has denied any knowledge of or involvement in the move.
The Fed cut interest rates three times last year to help mitigate a sharp slowdown in the labor market, ultimately keeping rates in a range between 3.5 and 3.75 percent, but Trump has said he thought rates should be at 1 percent or even lower.
What To Know
Trump announced last week that he would nominate Warsh, a 55-year-old former Fed governor and Wall Street veteran, to replace Powell in May when the latter’s term ends. Warsh served on the Fed’s board of governors from 2006 to 2011, having a hand in helping guide the country through the 2008 financial crisis.
Just one day later, at the Alfalfa Club, where Trump delivered a roast-style speech as a featured speaker to a room of business leaders and Washington elite, including former President George W. Bush, Supreme Court Chief Justice John Roberts, and Senator Mitch McConnell.
The Journal, citing a seating chart for the event, noted that Warsh and Powell were also expected to attend.
Trump told the group that he picked Warsh because he seemed straight from central casting—a possible reference to the company that specializes in hiring background actors and extras—and that he would sue Warsh if he didn’t bring down interest rates, the Journal reported, citing people in the room.
When asked about those comments aboard Air Force One later that evening, Trump defended the comments as just a joke while admitting he could have picked Warsh based on guarantees to lower the interest rate but in fact did not.
Trump also addressed another topic in his speech, such as potentially bombing Iran again, saying on Air Force One that the Mideast nation is “talking to us” and that “a lot of things could happen.”
At the Alfalfa Club, the president noted he had to steer clear of making jokes about Roberts because he needed to “kiss his ass.” When Trump made a joke about former Senator, Governor, and Republican presidential nominee Mitt Romney—calling him a left-winger—the audience applauded in support of Romney, according to one attendee, the Journal reported.
What People Are Saying
President Donald Trump in a post on Truth Social last week, in part: “I am pleased to announce that I am nominating Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. Kevin currently serves as the Shepard Family Distinguished Visiting Fellow in Economics at the Hoover Institution, and Lecturer at the Stanford Graduate School of Business.”
He later added: “I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best. On top of everything else, he is “central casting,” and he will never let you down. Congratulations Kevin!”
Senator Elizabeth Warren, a Massachusetts Democrat, in a video posted to X last week, in part: “Now, Trump has nominated a new chair, Kevin Warsh: He’s the son-in-law of one of Trump’s billionaire donors, and he’s also a prior Fed official, with a disgraceful track record of bailing out Wall Street instead of supporting American families during the 2008 financial crisis. If all of that wasn’t bad enough, Trump has publicly demanded a loyalty oath from whomever he nominates, so we know, without a shadow of a doubt, that Kevin Warsh is a pawn in Trump’s takeover. If Donald Trump is successful in seizing control of the Fed, America’s central bank will turn into the president’s own personal political weapon.”
What Happens Next
Powell’s term ends on May 15, at which point Warsh will be sworn in if he has cleared confirmation by the Senate.
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