Federal Reserve Governor Defies Trump Pressure, Advocates for Larger Rate Cut

On Friday, a Federal Reserve governor stated that he had a brief conversation with President Trump before the Federal Reserve's rate decision this week, and that his voting stance was not influenced by any pressure. The governor, who voted against a 25 basis point rate cut, advocated for a reduction twice that size, emphasizing that his decision was made independently.

“He called me on Tuesday morning just to congratulate me, that’s all,” the governor said. “We never discussed how I should vote, nor did we mention my stance on the ‘dot plot’ in the Federal Reserve’s economic forecast summary.”

In addition to opposing the 25 basis point rate cut, the governor's projection for the federal funds rate at the end of this year was significantly lower than that of the other 19 members of the Federal Open Market Committee. His expectations for future interest rates were also lower than those of most Federal Reserve officials.

Since Trump began his second term in January, questions about the independence of the Federal Reserve have been on the rise. Trump has consistently pushed for significant rate cuts and has publicly criticized Federal Reserve Chairman Jerome Powell, even giving him the nickname “Too Late.” In previous administrations, pressure on the Federal Reserve was typically applied in a more covert manner.

Trump has also attempted to remove Federal Reserve Governor Lisa Cook and indicated that next year, when selecting Powell's successor, he will consider whether the candidate is willing to implement an accommodative monetary policy as a key criterion.

Meanwhile, concerns about the governor's potential conflict of interest have been raised. He had only taken a leave of absence from his position as chairman of the White House Economic Advisory Council, rather than formally resigning. However, the governor dismissed these concerns as “somewhat absurd” and stated that he plans to serve on the Federal Reserve until January 2026, when his unexpired term ends.

“If the president tells me to continue serving as a Federal Reserve governor after January 2026, I will immediately resign, there is no doubt about that,” he said. “In fact, these discussions have motivated me to want to fully articulate my views and explain them in detail at the event on Monday, because I believe it is necessary to clarify to the outside world why my stance differs significantly from that of others.”

The governor is scheduled to speak at the New York Economic Club on Monday. The club is an important platform for leaders in the business and political spheres, and Trump has previously given a speech there.