FX.co ★ Donald Trump demands immediate rate cuts from new Fed chair

On April 21, 2026, US President Donald Trump said he would be disappointed if Kevin Warsh did not embark on immediate rate cuts after being appointed the Federal Reserve chairman. The president also called for a review of spending on the construction of a new Federal Reserve building amid the ongoing criminal probe into Jerome Powell.

In an interview with CNBC, Donald Trump expressed hope for a radical shift in monetary policy shortly after the Senate confirms Kevin Warsh’s nomination. Current Fed Chairman Jerome Powell is under investigation over testimony concerning renovations of the central bank’s offices, which Powell himself describes as unprecedented political pressure. Despite demands from the White House, the regulator did not lower interest rates during 2026, maintaining a hawkish stance despite regular public criticism from the administration.

Military actions in Iran have significantly complicated the Federal Reserve’s work by triggering a sharp rise in energy prices and cementing inflation expectations. Fed officials emphasize that the prolonged conflict poses risks to household welfare and forces a difficult choice between suppressing inflation and supporting economic growth. Most officials lean toward keeping interest rates high until the oil market stabilizes and volatility subsides. The administration fears that delayed monetary easing could dent domestic demand and investment activity over the long term.

The US banking sector is urging caution on changing borrowing costs until the geopolitical crisis is fully resolved. Wells Fargo CEO Charlie Scharf (New York: WFC) called a potential rate cut before the end of the war in Iran the wrong decision. “Until it becomes clear that the end is near, there is a real risk,” Scharf emphasized, noting a market consensus on the need to wait. Major financial institutions fear that hasty action by the regulator under political pressure could spark a new wave of inflation acceleration and confuse markets.